One of the questions I’m most frequently asked is how to work out employee holidays. It never ceases to amaze me how complicated holiday entitlement can actually get because it should be really straightforward!
The following explanation for working out employee holidays applies when you have a full-time or part-time employee who works the same hours every week. Other working arrangements have their own calculations to work out holiday entitlements, which quite often accrue on the basis of hours worked, when an employee’s hours vary.
In the UK, there is a statutory minimum holiday entitlement which means that every employee working fixed hours is entitled to 5.6 weeks holiday (this includes their Bank Holiday/Public Holiday entitlement). You can give more holiday entitlement than this, but you cannot give any less than the statutory minimum.
To work out exactly how many days each employee is entitled to per year, here’s the calculation:
Number of days a week worked X 5.6 = Annual holiday entitlement
So, on that basis, an employee who works full-time, five days a week, is entitled to 28 days holiday per year (5.6 x 5) and an employee who works part-time, three days a week is entitled to 16.8 days holiday per year (5.6 x 3).
Shorter Days
Many part-timers work 5 days per week, Monday to Friday, but their working days are shorter, e.g. 9.30am to 3.00pm to fit in with school hours, or they work mornings only or starting late or finishing early. As long as each day they work is the same length, the total number of days remains the same, i.e. 28 days including the bank holidays. Its just each day consists of fewer hours.
Longer weeks
If however an employee works 6 days per week, then the above rule does not apply. They are not entitled to more than 28 days per annum even though they work more than 5 days per week. The maximum holiday entitlement is 28 days per annum.
Can I give more?
There is nothing to stop employers from giving more holidays than the statutory minimum. Anything over and above the statutory holiday entitlement is called ‘contractual holiday entitlement’. You can give all your employees an extra day/days from the beginning or you can award additional holiday as a reward for long service. Remember what ever you do for your full time staff you must do on a pro rata basis for your part-timers. Giving more than the minimum can be a great source of competitive advantage in a tight labour market, especially if you can’t afford to compete on salary.
A few other points to note:
- Where you calculate holiday entitlement if the answer is not a round number, you should always round up to the nearest half day. For example, an employee working 3 days a week gets 17 days annual leave, although the actual entitlement is 16.8.
- This calculation does not apply when an employee’s hours change from week to week.
- The figures include the Bank Holiday or Public Holiday entitlements. All employees get these entitlements, on a pro-rata basis if they work part-time, regardless of what days of the week they actually work. Some people think if an employee doesn’t usually work Mondays then they don’t get the same Bank Holiday entitlement – that’s not correct.
- Employees on maternity leave, parental leave and sick leave continue to accrue holiday entitlement during their absence.
It’s essential to keep records of employees’ holiday entitlements, holidays they take and holidays they are owed. When an employee leaves, they will be entitled to receive payment for holiday they have accrued but not taken so you must make sure that you have accurate records.
It’s when you start thinking about other working patterns that’s where things can get much more complicated, such as if they don’t work the same days every week or their working days are not all the same length.