Holiday Entitlement Rules

Holiday entitlement

Salaried contract rules

1.1 Each employee is entitled to a minimum Statuary Holiday entitlement of 28 days.

1.2 Salaried employees regularly accrue their holiday across the whole calendar year (52 weeks). Therefore, each employee regularly accrues a proportion of the 28-day pot.

1.3 This is the equivalent to accruing 0.54 days of holiday per week.

Zero-hour contract rules

2.1 Hourly Employees similarly accrue 28 days over the year, however, unlike salaried employees, they do not work set hours and as a result accrue holidays based on their hours worked.

2.2 Specifically, they accrue a proportion of holidays from each hour worked.

2.3 Since hourly employees only accrue when they are working the holiday entitlement is accrued from a 46.4-week pot (52 weeks - 28 days).

2.4 This makes the percentage rate at which this holiday is accrued for hourly employees higher than for salaried, because latter accrue over a longer period of time (12.07% vs 10.76% respectively).

 

Alternative explanation

3.1 Legal minimum is 28 days per year. This equates to 5.6 weeks or 28 days/5 based on a standard 5 working days per week.

3.2 Do not accrue when on holiday. Therefore, only for 46.4 weeks (52-5.6).

3.3 Accrue rate = 12.07% (5.6/46.4) x 100

Examples:

• Assume an employee has worked for 9 months of the calendar year. How many days holiday have they accrued?
  • 28 days x (9 / 12) = 21 days
  • Therefore, this employee has accrued 21 days holiday of the 28 days available.
• An employee works 10 hours in a week, how much holiday would they accrue?
  • We know that hourly contracts accrue their holiday at 12.07% as explained above. 
  • Therefore:
  • (12.07/100) x 10 = 1.21 hours
  • Or
  • 12.07% x 10 = 1.21 hours
  • Therefore, this employee has accrued 21 days holiday of the 28 days available.

Things to remember 

4.1 Employees on sick leave still accrue holiday

4.2 All or some is carried over to the following year if none is taken

4.3 Holiday cannot be taken during maternity leave

How the labour cost for holiday accrual appears on the rota

5.1   Your organisation can decide whether to have NIC included in the holiday accruals calculation.

5.2   If NIC’s are or aren’t included in the holiday accruals calculation the cost on the rota represents:

• Included:
  • (Base Cost + Employers NIC)  x  Holiday accrual percentage
• If not:
  • Base Cost  x  Holiday accrual percentage

5.3 This is the same for salaried and zero-hour employees.

5.4 These are as represented in the rota page costs:

Holiday Accrual report rules

6.1 Key to the holiday accrual report is that employees accrue holiday either hourly or daily. This determines the value of accrued holiday, holiday taken and if the run rate is implemented.

6.2 Hourly employees accrue holiday at 12.07%.

6.3 We calculate an employees run rate based the average hours worked per day over a 13 week average. The total hours are then divided by the run rate to give the total available days holiday.

6.4 A glossary of the holiday accrual report can be found here.

Here is a brief overview of how we highlight holiday on S4

7.1 The holiday report is supposed to be an easy guide to visualise the amount of accrued holiday as per employee. The report should be read differently depending on the pay rate of the employee (paid hourly or daily).

• Hourly - Zero hour contract
• Daily - Salaried employee

 

Weekly Breakdown

8.1 It s possible to view the number of holidays accrued on a weekly basis through our weekly breakdown. This will show you a week on week breakdown of the hours worked each week and the number of days accrued.

• Salaried

A salaried member of staff will always accrue 0.54 days holiday per week. The breakdown of this calculation is explained above.

• Zero-hour

An hourly employee will accrue 0.1207 hours every hour worked. This is highlighted in the accrued (week) column.

8.2 As you can see between 23/01/2017 – 29/01/2017 the highlighted employee worked 13.08 hours that week. If you multiply 13.08 by 0.1207 you are left with 1.58 hours accrued. The hours accrued in the weekly breakdown are translated onto the holiday accrual report as accrued hours. Holiday is then worked out using that persons run rate (Calculated as that persons’ average hours worked per week in a 13-week spell), representing days worked after dividing accrued hours by this figure (run rate).

Accruing holiday when on Maternity, Paternity or Sickness leave

• Salaried employees:
  • Accrue holiday at 0.54 days per week
• Zero hour:
  • S4 works out the average run rate (12-week average)
  • S4 works out the average shift length per week (13-week average)
  • Multiply both these together
  • Multiply by 0.1207
  • This figure is the hours accrued per week