Payroll - Holiday entitlement calculation - The Book-keepers Forum (UK)

ms84 · Newbie

Payroll - Holiday entitlement calculation

Tom McClelland · Senior Member

That looks fine but over-complicated for the specific situation.

It would be simpler just to say 5.6 x 25.

Tom McClelland · Senior Member

Dividing total hours worked by 8.29 (or multiplying by 12.07%, which is the same thing) is more useful where variable hours are worked.

ms84 · Newbie

Hi Tom,

That's brilliant thank you! Was causing a right headache here.

I have another question. Why is the 5.6 weeks used? Is it just because this is what a normal (5 day week) employee is entitled to, therefore you just multiply that by the hours to calculate what hourly workers are entitled to?

Tom McClelland · Senior Member

5.6 weeks is the annual minimum statutory holiday entitlement. All the other figures like 12.07% and 8.29 are derived from the starting point of 5.6 weeks.

46.4 x 12.07% = 5.6
46.4 / 8.29 = 5.6
5.6 + 46.4 = 52

5.6 weeks applies whether the employee works 1 day a week or 7 days a week. But thing get more complicated when an employee works 1 5hour day 1 week then 6 8 hour days the next week. Multiplying total hours worked by 12.07% gives a sensible answer in all situations.

ms84 · Newbie

Thanks again Tom.

Right, complicated one. This employee works 5 days a week at varying hours. He has so far worked a total of 691.25 hours in the last 12 weeks. What entitlement is he due?

What if we calculated this from the start of the tax year, with the employee having worked 2520 hours so far?

Tom McClelland · Senior Member

691.25 x 12.07% = 83.5 hours to be paid (and taken as holiday)
2520 x 12.07% = 304 hours to be paid (and taken as holiday)

The *rate* at which the hours should be paid should be the weighted average of hourly rates during the previous 12 weeks before the holiday.