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Holiday FAQ's
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Holidays paid by the hour
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My employer is paying holidays every three months based on 1 hour's holiday for every 10 hours worked, is this right? |
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Your employer is doing everything wrong. Firstly holiday days (hours) can't be paid unless they are taken off (with one or two very specific exceptions), secondly, holidays are not accrued based on the number of hours worked and even if they were the percentage of accrual your employer is using is wrong. Holidays are accrued based on a yearly entitlement divided by how far into the year you are i.e. half way through the year equal half of your yearly entitlement. The amount of weekly holiday pay is based on an average of the preceding 12 weeks gross pay, the actual payment made is the number of days being taken divided by the number of working days in a regular week multiplied by the average weekly pay i.e. 3 days holidays when working a 5 day week at an average pay of £200.00 is £120.00 which is 60% or 0.6 of a week. Holidays should always be expressed as percentages or decimals of a week rather than days and definitely never hours. |
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Holiday calculation based on weekly hours
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If an employee who works 40 hours gets 25 days holiday based on a 5 day working week how many days does an employee working 28 hours get? |
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Both employees get exactly the same, that is 5 weeks holiday (don't forget the extra for bank holidays). The amount of holiday pay they get for each week will depend upon their salary; if employee A earns twice as much as employee B then A will receive twice as much holiday pay for the same period as employee B. One working week will always be one working week regardless of the actual number of days or hours worked so all holiday calculations should be based on weeks alone. |
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Rate at which holidays should be paid after a pay increase
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Should holidays be paid at the pay rate under which they were accrued or at the employees current pay rate? |
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Holidays are always paid at the current pay rate regardless of when they were accrued. Holiday pay is intended to represent a normal working week as if it had been worked. When working out an average of the preceding 12 weeks the weekly amounts at the old rate should be adjusted to account for the pay rise. |
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Holiday rate when paid monthly
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If holidays are paid by the day what is the correct method of working out the daily pay rate? |
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Holidays should be paid based on weeks rather than days. When an employee is leaving all the untaken accrued holidays must be paid up. After working out the number of weeks holiday that needs to be paid either work out the average weekly amount over the last 12 weeks if the pay varies or divide the yearly salary by 52. If you really need the daily rate then divide the calculated weekly pay by the number of working days in the week for that employee. |
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