How to calculate holiday pay for part time employees can seem quite daunting at times but it is a simple mathematical formula. All employees are entitled to a statutory minimum holiday pay and this is a period of 5.6 weeks per year, which includes bank and public holidays. To find out how to calculate your employee’s entitlement, first part is the need to understand is the definition of what a “week” is for your employee.
A normal, full time employee working 5 day a week would get 5 days multiplied by 5.6 weeks holiday pay per year, this equals to 28 days per annum, this calculation will include all bank and public holidays, (currently 8 in England).
Part time workers
When you are looking to understand how to calculate holiday pay for part time employees you can include bank and public holidays within the 28 day entitlement. The first step is to calculate the number of hours your employee works each week.
Here are two examples:
Your employee works a regular 12 hours per week:
12 hours multiplied by 5.6 weeks holiday pay equals to 67.2 hours annual holiday per year.
Your employee works two full days per week:
2 days multiplied by 5.6 weeks holiday pay equals 11.2 days annual holiday per year.
It will probably easier to calculate your employee’s holiday pay by using the number of hours if they do not work a normal day.
Accrual Rate
You can calculate the accrued holiday pay entitlement for any given period by calculating the rate at which the time is accrued.
For example, your employee works a total of 70 hours for the year. You will then need to divide the 70 hours by the number of weeks in the year, which is 52, so 70 divided by 52 equals 1.35 hours, it is important not to round down the figure. This employee accrues holiday pay as a rate on 1.35 hours for each week worked.
For any employees who work different hours each week, it can look a little more complex, it is advised and easier to average the definition of a “week” by calculating the number of hours worked over the previous 12 week period.
For example, your employee is on a ‘zero’ hours contract and over the previous 12 weeks, they have worked; 3 weeks of 10 hrs, 2 weeks of 8 hrs, 1 week of 14 hrs, 6 weeks of 4 hrs a total of 84 hours over the last 12 weeks. The next step is to calculate the ‘weeks’ hours, so 84 hours divided by 12 equals to an average of 7 hours per week. This figure is then multiplied by 5.6 weeks holiday pay, which equals 39.2 hours accrued per annum, should these hours be continued for the whole year. In this case, however, the next 12 weeks working may be different, so the next step would be 39.2 hours divided by 52 weeks giving you the weekly holiday pay accrued, which will the need to be multiplied by 12.
84 hours ÷ 12 = 7 hours 7 hours x 5.6 weeks = 39.2 hours per annum
39.2 hours ÷ 52 = .75 hours
.75 hours x 12 weeks worked = 9.05 hours accrued holiday entitlement
Keeping Proper Records
It is really important to keep proper records for all your employee’s, noting the number of hours worked including any overtime undertaken, so when the time comes to working out how to calculate holiday pay for part time employees, this is easily achieved by examining the work records for the previous 12 weeks.
