I always find it difficult to work out holiday pay for irregular hours worked. This employee not only works irregular hours but is also paid a salary and is leaving the company.
Can you tell me if this is the right calculation please: (and if not, how I should be working it out)
Employee has worked 20 weeks of the year.
(28 days holiday) 28/52 = 0.5384615 days holiday due for each week worked
20 x 0.5384615 = so 10.77 days holiday due??
Salary 20,000 (20,000/365 = 54.79 per day)
10.77 x 54.79 = £590.09 holiday pay due.
I know this is probably a really bad way of working it out but without knowing what actual hours are worked I can't think of any other way.
Thanks in advance for any help
Rachel
-- Edited by rachel_mclean on Wednesday 16th of September 2015 03:24:42 PM
Thanks John - the hours are irregular (it's farm work) he is mostly working 7 days a week not 5. No bank holidays have been taken.
Thanks Michelle, but that does not work to calculate this because the hours are completely irregular and there is no record of the days worked as the employee is paid salary. (long hours 7 days a week in the summer and short days as and when in the winter) so I don't know and won't be able to find out the hours worked.
Hi Rachel
You mention he is paid a 'salary' - can I just clarify - is he being paid the same amount every month? To even out his wages across busier and quieter months? If so then would you not apportion the holiday pay in the same way?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Yes he is paid salary and paid the same every month as you said.
I'm not sure how I would apportion the holiday the same way, he finished yesterday and he has taken no holiday yet so he needs to be paid his holiday with his last wages.
Hi Rachel
Sorry but I was being a numpty with my last sentence then - with 'salaried' staff your holiday pay is included in the amount that is paid each month.
So you just need to know the cut off day for salary calculation or if he is paid eg 2 weeks in advance and 2 weeks in arrears, or all in arrears. The all you need to do is allocate a proportion of his salary which is due to his leaving date. eg if he is paid all in arrears, then he is entitled to 17 days of this months pay (£xx annual /365 x 17)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
with 'salaried' staff your holiday pay is included in the amount that is paid each month.
Not strictly true, but I know what you mean. A full time worker is entitled to 28 days holiday a year, and that person will receive £1,667 ish a month regardless of when he takes his holiday.
However, at the end of employment holiday pay still needs to be paid for holidays accrued but not taken. Rachel has correctly calculated that this comes to 10.77 days based on 20 weeks
Now the question remains as to what is the daily salary. This is somewhat marred by the fact the guy works really long hours in the summer, lets say 77 hours a week, but very short hours in the winter, and possibly only 3 days a week. A daily salary of £54.79 (Rachels calculation) would put this guy below minimum wage during the summer months, which is illegal, so I think it's unfair to go with a daily rate, as he won't be working 7 days a week through the winter months.
Rachel, have a look at irregular hours 2 on this link
http://www.puddlepayroll.co.uk/holiday-pay-statutory-entitlement-and-how-to-calculate-an-employees-allowance/ We don't know the hours so we have to base it on pay. Total pay £7692.30 x 12.07% = £928.46.
I think this is the fairest way to do it.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
ahhh I just need to check something, I think I am about to make a mistake!!!
So I think I need to pay him
Pay £833.33 (worked until the 15th September, usually paid on the last day of the month but left early) so paid half a months salary
PLUS
Holiday pay £928.46 (20,000 x 12.07% 2414.00/52*20)
Total pay £1761.79
THEN I was re-reading the replies above about holiday pay being included in the salary BUT he has not taken any holiday so far. So is my calculation right? that he should be paid extra for holiday?
Had he taken holidays entitled to he would just be paid 15/30ths as you have ascertained, and I think that's what Joanne was referring to in her comment.
But he's also owed the holiday pay on top, as he didn't take any previously
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
