How to calculate Holiday Pay for part time employees is a simple mathematical formula. By statute, all employees are entitled to a minimum holiday pay period of 5.6 weeks. All you need to know is the definition of “week” for any employee. ie An ordinary, full time, 5 day a week worker gets 5 X 5.6 holiday pay which equals the 28 days pa you will have heard about. This is inclusive of the known bank holidays, (currently 8 in England), there is no need to consider or “add” on bank holidays, they are already counted.
When you are working out how to calculate holiday pay for part time employees you can include public (bank) holidays within this 28 day tally. The next logical example would be a part-timerwho works (say) 12 hours a week. ergo, her “week” is 12 hours, multiply by 5.6, and you get 67.2 hours annual holiday pay entitlement. ( When you have employees who work less than what we could call a normal day, it is best to reduce the calculation to hours) To calculate the accrued holiday pay entitlement for any given period, first, calculate the rate at which it’s accrued.
In this example, 67.2 hrs pa. divided by 52 equals the rate, so 67.2 div 52 =1.29 (hrs) so this employee, accrues holiday pay at the rate of 1.29 hrs for each week worked. So, after (say) 12 weeks, they will have earned 15.5 hrs holiday (1.29 X 12). For employees who work varying hours, it can sound a little more complex, it is advised to average the definition of “week” by calculating hours works over the previous 12 weeks.
Keeping Proper Records
When working out how to calculate holday pay for part time employees this is easily achieved by going over the work records for the previous 12 weeks and noting the amount of hours worked. You must only count weeks where the employee did actual paid work, you should disregard any weeks where they did no work or were sick. Add up the hours worked and divide by 12, that gives you the average for the period which can be used to help show how to calculate holiday pay entitlement for part time employees. use this link to help you work out holiday pay http://www.nidirect.gov.uk/calculating-holiday-entitlement See also my other page An excellent advice piece by Amy Paxton of Croners