How do we calculate the holiday entitlement for part-timers?

Holiday entitlement should be worked out on the number of hours normally worked in the week. If these hours vary, employers will need to use an average working week to calculate holiday entitlement – reserving the right to amend it later in the year to reflect actual hours worked, or, obtain the permission of the worker (a legal requirement) to recover holiday money overpaid. Many employers use a figure of 12.07% of hours worked to calculate holiday for those that work irregular hours, e.g. for each hour worked, the worker is entitled to 7.24 minutes of holiday.

The sums involved can leave tricky amounts of holiday time to allocate and pay for. Some ways employers can deal with this are as follows:

• give pay in lieu of time off (but only for holiday over and above the statutory 5.6 week minimum)
• round the time off up (but not down) to the nearest day or half day
• give the hours as part of an otherwise unpaid day off
• use the hours to allow the worker to come in late or leave work early
• ask the worker to carry the ‘new’ holiday time forward to the following year (bearing in mind that all workers are required to take at least the equivalent of four weeks of holiday in the current leave year)

Fixed hours

If working hours do not vary (part time or full time) holiday pay will be calculated using the usual pay rate.

For example, if 37 hours every week are worked and paid at £400 a week, when a week’s holiday is taken the worker must get paid £400.

Holiday pay for monthly paid workers can be calculated using the tool on Gov.UK: Click here.

What if hours are not fixed?

If a worker has no fixed or regular hours, their holiday pay will be based on the average pay received over the previous 52 weeks. An example of this is for casual work on a zero-hours contract, or for those who work shifts that change without a fixed pattern.

If for any of the 52 weeks no pay was earned, employers should use an earlier week in its place for calculating holiday owed.

If only a small amount of pay for a week was received – e.g. for Statutory Sick Pay, another week should be used for the purposes of calculating holiday, such as when where a worker’s usual pay was received. This will ensure workers get the same pay when on holiday, or at work.

Employers should only count back as far as needed to get 52 weeks of a worker’s usual pay. If necessary, employers can look at pay received over the previous 104 weeks, but no further.

What if a worker has not been employed for 52 weeks?

If a worker has been employed for less than 52 weeks, employers should look at how many full weeks of employment there have been e.g. if 26 full weeks have been worked, look at the average pay received by the worker during those weeks to calculate their holiday pay.

Examples for working out holiday pay where there are no fixed hours can be found on Gov.UK: Click here.