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What Is Holiday Pay – The Ins And Outs Of What Counts

There are always grey areas with the issue of pay and rewards.  For some people, for example the non-contract self-employed, it is a fairly easy process in that the income you have is only based on the amount you are working.  Similarly for the regularly contracted worker, your salary is 52 weeks a year at the same rate and the tax and holiday pay is a simple formula based on the amount you get paid and work each month.

For some, the amount of holiday pay you receive could be slightly more complex. As a rule of thumb you should be entitled to the national basic holiday entitlement of 5.6 weeks per year.  This is based on you working a standard 5 day working week and represents 28 days annual leave.  You are therefore entitled, assuming you work a regular week, to 28 days worth of paid holiday a year.

If you are a part time worker then it is actually a fairly simple process of working out the fraction in relation to the holiday allowance.  For example, if you work a .5 contract then you will be entitled to 14 days paid leave.

In both the above cases there are rarely issues and it is fairly easy for you to work out your entitlement.  Where problems can occur is when you are not on a fixed hours contract.  If you work long hours for example this does not automatically entitle you to additional holiday.  28 days is the statutory minimum and the fractioning only works for less hours.  So if for example, you worked 6 days a week you would not automatically be allowed any extra holiday entitlement.

Holiday pay is accrued through payments and entitlement is based on working hours.  In theory, you can only take holiday if you have already accrued enough entitlement.  In practice this means that you may be allowed to ‘borrow’ holiday in advance.  This is common when someone joins a company on the understanding that they already have leave planned before they accrue entitlement.  It works out in the long run but if you leave before you have paid back the hours you borrow, you may find the business takes back the holiday pay at the end of your service.

If you are working on a casual contract your holiday pay will be based on 1 week per 12 weeks average pay in the previous 12 weeks, discounting any gaps.  This is a more difficult one to work out so you may want to check the government advice on the link at the end of this article.

Holiday entitlement also includes your right to:

  • Accrue holiday entitlement during maternity, paternity and adoption leave
  • Build up holiday entitlement while off work sick and/or choose to take holiday at the same time as sick leave

These are rights and not contractually variable guidelines.

Currently there is a legal discussion surrounding the payment of holiday pay where commission is part of the regular salary.  At present the European Court is considering if this is legal because it encourages people not to take holiday.  If they decide it isn’t legal, then there may well be hundreds of people able to claim back holiday pay.




Published by Harvey

almost 11 years ago


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