Holiday allowance
All employees are entitled to a minimum of 5.6 weeks paid holiday for each year they have worked for an employer. This allowance includes 1.6 weeks for all statutory and public holidays so some employers may choose to reflect holiday as 4 weeks plus public holidays.
An Employer whose nanny is not required to accompany them on holiday may like to agree with their nanny, when the employment starts, that at least part of their entitlement is to be taken when they themselves are on holiday.
It is also important on the outset to agree with employees how much notice they should provide to you to take holiday, when they can take holiday, how much they can take in one go and other clauses. All of these are covered by the NannyPaye contract of employment.
When an employee stops working for an employer an assessment should be made to calculate how much holiday has been taken by the employee in comparison to how much as has accrued. NannyPaye can perform this calculation for you with any unused holiday being added to the final payslip and any overtaken holiday (contract permitting) being deducted from the final pay.
Holiday pay for part time Employees
Part time employees have exactly the same holiday accruement as full time employees albeit at their part time rate of pay. For example an employee who works full time (5 days per week) and earns £300.00 per week will accrue 4 weeks paid holiday per year (plus the relevant Bank Holidays) at a rate of £300.00 per week.
A part time employee (e.g. 2 days per week) earning £150.00 per week would also accrue 4 weeks holiday per year (plus the relevant Bank Holidays) but only at the value of £150.00 per week.
Some employers also like to define holiday by the number of days they can take and be paid for in each year. To calculate this we simply times the working days by the 5.6 weeks holiday per year.
For example a full time employee would receive 5 days x 5.6 weeks = 28 days paid holiday per year including Bank Holidays. If your employee is part time (perhaps on 2 days per week) they would receive 2 days x 5.6 weeks = 11.2 days paid holiday per year including bank holidays.
Days Per Week Worked | Holiday Entitlement |
|---|---|
1 | 5.6 |
2 | 11.2 |
3 | 16.8 |
4 | 22.4 |
5 | 28 |
You should note that if your employee works different hours each day then their entitlement would need to be calculated in hours to ensure that they recieve their full entitlement. Similarly if there is more than one rate of pay then the fairest way to calcuate their holiday balance is in monetary terms.
Holiday pay for Employees whose hours vary
When an employees working hours vary week on week, to calculate thier holiday pay you must calculate their average pay over the previous 52 weeks worked, excluding any weeks where zero hours were worked. This may mean that the actual reference period takes into account data from further back than 52 weeks from the date of thier leave, but should go back no further than 104 weeks. If this gives fewer than 52 weeks to take into accoun then the reference period is shortened to that lower number of weeks.
For example, an employee has the following gross pay data:
Week | Gross pay per week | Paid/Unpaid week |
|---|---|---|
Week 1 | £300 | Paid |
Weeks 2-5 | £350 | Paid |
Week 6 | £0 | Unpaid |
Week 7 | £10 | Paid |
Weeks 8-22 | £100 | Paid |
Weeks 23-25 | £0 | Unpaid |
Weeks 26-40 | £400 | Paid |
Weeks 41-45 | £200 | Paid |
Weeks 46-48 | £0 | Unpaid |
Weeks 49-54 | £180 | Paid |
Weeks 55-59 | £150 | Paid |
The employer should discount weeks 6, 23-25 and 46-48 in the example above, which is seven weeks, as there was no pay in these weeks, reflecting that the worker performed no work. As 7 weeks have to be discounted, the employer must go back a further 7 weeks to take the total to 52 weeks of pay data when calculating holiday pay for this period. These extra weeks are weeks 53 – 59 in the table above.
The total pay over the 52 weeks is calculated by summing the pay for each week. The calculation is:
(1 × £300) + (4 × £350) + (1 × £10) + (15 × £100) + (15 × £400) + (5 × £200) + (6 × £180) + (5 × £150) = £12,040.
This is then divided by the 52 weeks-worth of data used to calculate the average;
£12,040 ÷ 52 = £231.34.
A week’s holiday taken in the week following would therefore be paid at a rate of £231.34 (which is the average weekly pay from the pay data in the table above).
Further Support
In your Members Area, you will find a holiday calculator which will calculate the amount of holiday due for full or part years for employees with normal working hours/days. This is in the 'Calculators' section.
Additionally, due to the complexity of calculating holiday pay for an employee with varying hours, we have created a spreadsheet to calculate this for you, which can be found in the section called 'Your Legal Documents'.