Calculating holiday allowances for part-time staff

Victoria Greaves of citrusHR explains how to calculate holidays, including bank holidays, for part-time employees

Part-time employees are entitled to equal treatment with full-time employees as a result of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. This means that they should receive the correct pro-rated amount of annual leave as a full-time employee doing the same job. To ensure compliance with this legislation and The Working Time Regulations 1998, you could use the following calculations:

If an employee is contracted to work a set amount of days and works full time five days a week, they are entitled to a minimum of 28 days statutory annual holiday entitlement a year. This amounts to 5.6 weeks. It is up to you whether you allow employees to choose 20 days holiday and require them to take the eight bank holidays as holiday or whether you give them 28 days holiday and no automatic day off on a bank holiday. The minimum statutory holiday entitlement would not increase even if the employee works six or seven days a week.

It doesn’t matter if a part time employee doesn’t usually work on a bank holiday, you still need to make sure that they don’t lose out and pro rata the full 28 days holiday to reflect their hours rather than the days of the week they work.

If an employee’s working week is three days a week, you can multiply three days by 5.6 which gives 16.8 days as their annual holiday entitlement. If you offer full-time employees more holiday than the statutory minimum whilst doing the same role you will need to make sure a part-timer is given the equivalent. For example, if your full-time employee is entitled to 30 days holiday which is six weeks, you multiply three days by six which would give them 18 days holiday.

If an employee does not have a standard number of days each week because the contract states that they work variable days or hours, you can calculate holiday entitlement on an accrual basis.  It is easier to calculate their annual entitlement in hours rather than days by multiplying the number of hours worked in one week by 5.6 (or the equivalent holiday allowance if more than the statutory minimum).

If the employee works 22.5 hours a week and you want to work out the minimum holiday you multiply 22.5 x 5.6 = 126 hours.

How do I calculate holiday pay?

For each day or hour of holiday an employee should get their normal hourly or daily rate of pay. This is straightforward if the pay and hours are consistent.

If a part-time employee works fixed hours across five days, you calculate their actual holiday pay at 1/260th of their usual salary in the same way that you do with full-timers who work a fixed pattern. If they work set hours each week, but different hours each day, then you would calculate it based on their hourly rate (annual salary divided by 52, divided by weekly hours).

If a part-time employee works different hours on different days and hours vary from week to week you calculate their pay based on their average weekly pay over the previous 52 weeks. You would need to include regular overtime, bonuses and commission in the calculation.

To work out average weekly pay, providing the employee has been employed for at least 52 weeks (if the number of weeks is fewer than 52, use that number of weeks) add together how much they were paid before deductions such as tax and National Insurance for the 52 weeks and divide by 52 weeks to calculate their average weekly pay.

Holiday entitlement and pay calculations can be complex for part time workers. The citrus HR software takes the headache for these calculations away by doing it all for you.

Victoria Greaves is HR consultant at citrusHR.

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Victoria Greaves is HR consultant at citrusHR.

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