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Calculating Holiday Entitlement
Sounds simple right? But take into account part time workers, shift workers and bank holidays and it all gets very complicated. Getting it wrong is more common than you may think and could even potentially give rise to a financial lost within your business.
Below I give an example of a part time worker and how to calculate their holiday entitlement.
Regardless of your full time employees working pattern, statutory holiday entitlement is 5.6 weeks per year or 28 days, with bank holidays and public holidays included. Of course you as an employer may choose to offer more.
If your employee works a six or seven day week, the statutory entitlement of 5.6 weeks will still be 28 days. Part time workers are entitled to the same number of holiday on a pro rata basis.
In this example I will take a fictional employee, Greg, an office worker who works Monday, Wednesday and Friday, whose employer closes on bank holidays, and offers 25 days holiday plus 8 bank holidays.
First we need to work out Greg’s basic entitlement (without bank holidays). The first step of this calculation is to work out how many weeks 25 days is; to do this we divide 25 by 5 days which equals 5.
The second step is to multiply how many days Greg works by the amount of weeks he is entitled to, so:
3 day working week X 5 weeks holiday (excluding Bank holidays) =15 days basic
Greg is therefore entitled to 15 days basic annual leave.
Furthermore Greg is entitled to a pro rata amount of paid bank holidays. There are usually 8 bank holidays each year so let's work on that figure.
- 8 bank holidays / 5 working days = 1.6
- 1.6 x 3 days worked per week = 4.8 (which is rounded up to 5)
Greg’s total holiday allowance is then worked out as follows:
• 15 days basic entitlement + 5 bank holidays = 20 days
However, if Greg’s working days happen to fall on a bank holiday when his employer is closed, this must be deducted from the overall total. As Greg works on a Monday and a Friday, and there are 5 bank holidays that fall on these days of the week in 2013, Greg’s holiday entitlement for 2013 is 20 minus 5 =15 days.
You may be surprised to know that many businesses allow their part time employees the same number of bank holidays to those that work full time. My word of advice is to be careful as this could give rise to issues with aggrieved full time employees.