Holiday Pay Calculation

[rogersh]

I have been informed by Angard payroll re calculation of holiday; “ You earn 12.07% of your gross weekly wages as holiday entitlement. This amount is then divided by your current pay rate to calculate your accrued hours.. Your pay rate gradually increases from the lower rate to your current standard rate as you work more weeks at the higher rate, however your entitlement remains the same. So while your pay rate is one rate your holiday pay can be lower but this is correct. At a lower rate you will accrue more hours and at a higher rate you will accrue less hours.”

The following example taken from a website agrees, IN PART, as a way to calculate holiday pay for casuals.
“Since April 2009, under the Working Time Regulations 1998 (as amended), all employees have the right to 28 days, or 5.6 weeks, paid leave (including statutory bank holidays) each year.
5.6 weeks holiday, divided by 46.4 weeks (52 weeks less 5.6 weeks holiday) equals 12.07%.
A member of staff who is full time, or part time with fixed hours, usually has their holiday pay included in their salary. Unless it is otherwise contracted, casual staff, or those with irregular hours, have their holiday pay added on to their pay. Sub contractors (those not paid through your payroll) are not normally entitled to holiday pay.
So the simplest way to calculate how much a member of staff who works irregular hours is entitled to receive in holiday pay is to multiply their actual earnings by 12.07%.
For example, if a casual worker has worked 100 hours, they will have accrued 12.07 hours holiday. If their hourly rate is £10, they are entitled to £120.70 holiday pay.
It is vital that the holiday pay is separately identified on their pay slip, as it is illegal to include it with their basic wages.”

So given Angard payroll calculation method & the example I assume this would mean;
100 hours x £10.00 per hour = £1,000.00 Gross pay x 12.07% = £120.70 holiday pay
120.70 / 10.00 = 12.07 hours accrued.
Assume 25 hours per week (1160 p.a) at same rate = £250 x 12.07% = £30.175 / 10.00 = 3.0175 hours accrued
Annual calculation 46.4 x 30.175 = £1,400 holiday pay 46.4 x 3.0175 = 140 hours accrued
Enter 1160 hours on GOV.UK site - holiday entitlement for casuals - & you get 140 hours entitlement.

This calculation is based on 28 days statutory holiday but might be more under AWR in line with equal holiday rights as permanent staff.
The hourly rate & hours would be variable depending if you worked different shifts but an average rate would be used in the calculation based on the preceding three months you worked before the holiday, according to the contract.

Has anyone information as to the reason the hourly rate you receive could vary from the example above.




Further to my post i have obtained the following example from payroll on how holiday rate is calculated;

Most important; SHIFT ALLOWANCE IS NOT INCLUDED IN GROSS when calculating holiday pay which is 12.07%
of gross pay.

A candidate who has been paid a gross amount of £200.00 will receive a holiday gross amount of £24.14.
24.14 divided by £6.00 = 4.023. £6.00 x 4.023 = £24.14.
24.14 divided by £7.00 = 3.448. £7.00 x 3.448 = £24.14.

I have calculated the hours you would need to work to earn £200.00;

33.33 hours x £6.00 = £200.00 = 4.023 accrued = £24.14
28.57 hours x £7.00 = £200.00 = 3.448 accrued = £24.14
£48.28 divided by 7.471 = £ 6.50 holiday rate

Total hours 61.9 x 12.07% = 7.471