Step-by-Step Instructions for Figuring Out Your Pro-Rata Vacation Pay

Every year, both full-time and part-time employees are entitled to a certain amount of annual leave. However, part-time employees will not be entitled to the same benefits as full-time employees. What if a new employee joins your company in the middle of the year? They, too, will not have the same holiday entitlement as an employee who has been with you since the beginning of the year.

But how much annual leave do these employees have, and how do you calculate it?

Fortunately, figuring out both of these is fairly simple. Before we get into how to calculate pro-rated holiday pay, it's important to understand your legal obligations as an employer.

What is the legal vacation allowance?

Almost all UK employees are legally entitled to 5.6 weeks of paid vacation per year. This equates to 28 days of paid annual leave per year for those who work five-day weeks.

Workers in the United Kingdom have the right to be paid for leave holiday entitlement during maternity, paternity, and adoption leave under UK law. Workers have the right to accrue holiday entitlement while on sick leave, and they have the legal right to request holiday leave concurrently with sick leave.

The law applies to agency workers, people who work irregular hours, and even people who work on a zero-hour contract.

In all circumstances, statutory paid holiday leave is limited to 28 days. As a result, even employees who work six days a week will only be entitled to 28 days of paid vacation.

It is entirely up to you whether or not to include bank holidays in this statutory annual leave. It is also up to you whether you provide additional leave beyond the statutory 28 days. You can make your own rules for any additional leave you provide above the statutory amount. This is why many employers like to give extra leave as a reward for long service.

What about part-time employees?

Part-time employees may work fewer than five days per week or at irregular hours. In any case, they are still legally entitled to their five minutes. Every year, employees are given six weeks of paid vacation. However, because they will almost always work fewer hours per week than full-time employees, this 5 The 6-week entitlement will not always be extended to 28 days.

How to Calculate Pro-rata Holiday

The quickest and easiest way to calculate your part-time employees' holiday entitlement is to multiply the number of days they work each week by 5. 6

For instance, if a pro-rata employee works two days per week, their statutory holiday entitlement is two times five days. 6, or 11 2 days

Things become more complicated if your part-time employees work different hours on different days of the week. You may also have difficulty calculating holiday entitlement for shift workers or term-time employees. The important thing to remember is that people who work irregular hours are entitled to paid time off for every hour worked.

We have a handy online holiday entitlement calculator to assist you in calculating the statutory holiday entitlement for each member of staff, regardless of their hours or shift patterns.

Employees who start or leave during the year

It is up to you to determine when your "holiday year" begins and ends. Some businesses make it a calendar year, beginning in January and ending in December. Others prefer to align their holiday season with the fiscal year, starting and ending in April.

Employees earn holiday pay throughout the year. Employees will accrue 1/12 of their total entitlement each month, whether the calendar or fiscal year is used.

Employees who join or leave during the holiday season should be paid based on the amount of time they have worked for you.

Calculate an employee's holiday entitlement from the day they join if they start part-way through the year. If your holiday year begins on January 1 and they join you on April 1, their vacation entitlement will be calculated based on the period from April 1 to December 31. This is 9/12 of a full year's vacation allowance. So, if they are a full-time employee who is entitled to 28 days of paid leave per year, this employee who starts on April 1 will be entitled to 21 days of paid leave.

Similarly, if an employee leaves part way through the holiday season, their entitlement will be calculated based on the time between the start of your holiday season and their departure date. Again, if your holiday year begins on January 1 and an employee leaves on April 1, they will receive 3/12 of their full year's holiday allowance. If they are a full-time employee with the right to 28 days of paid leave per year, an employee who leaves on April 1 will have accrued 7 days of paid leave.

If an employee is leaving and you discover that they have taken more than their allotted number of vacation days, you may be able to reclaim the money on their final pay stub. However, this must be agreed upon in writing ahead of time. If, on the other hand, an employee has taken fewer than their allotted holidays, the company could move the employee's departure date forward or consider paying them instead of giving them time off.

Take the guesswork out of calculating vacation time.

Paid time off and holidays are supposed to be beneficial. They provide an opportunity for employees to relax and unwind before returning to work refreshed and renewed.

It's unfortunate that so many businesses continue to struggle with holiday entitlement. The process for requesting leave in some businesses can be so complicated that many employees may end up taking less than their statutory entitlement.

An employee who never takes a break or takes less time off than they should is more likely to develop stress and anxiety.

Your employees require a break, and it is your responsibility to make things as simple as possible.

Our absence management software makes it simple to manage vacation entitlement. With our built-in holiday tracker, any employee can log in from any device and instantly see how much leave they're entitled to and how much they have to work. And if they need to schedule time off, they can submit a request and receive a confirmation in a matter of seconds.