I was asked recently if there is an easy way to calculate how much holiday pay a casual worker receives. For once, I was able reply yes; there is an easy way to answer a payroll question!
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 there it is, the easy way to calculate holiday pay for your staff who work irregular hours!