Accrued Holiday Pay

from the Cloud Payroll Blog

Posted on Wednesday, 29th Jan '20

by Duane Jackson


Thanks to how easy it is to integrate other systems in to our payroll software, we now have a number of clients that are paying employees on an ad-hoc basis.

Their systems tell our systems how many hours should be paid and the rest all happens by magic.

If you're immediately paying your employee their 12.07% accrued holiday pay then it's relatively easily dealt with.

You could just add an automatic addition to the payslip that's auto-calculated as 12.07% of the total. Many do this already and it works just fine for their needs

Tracking Accrued Holiday Pay

But sometimes the needs can be more complicated.

What if you want to keep track of how much holiday pay each employee is owed, but not pay it straight away?

We've just released a new feature specifically for this purpose.

The details of how to use it are in the user guide.

We've tried to keep it as flexible as possible. You can make adjustments to the calculated amounts, easily view the balance, choose to automatically pay the amount due, etc.

Why 12.07%?

The statutory holiday entitlement is 5.6 weeks per year.

That's 12.07% of the year if you worked full time.

So when you need to work out how much holiday an ad-hoc worker is entitled to you apply the same percentage to the time they've worked

An employee who works 10 hours in a week would get 72.6 minutes of holiday pay.

12.07 รท 100 x 10 = 1.21 hrs

The result is 1.21 hours, which is 72.6 minutes. That means you owe the employee around 1 hour and 12 minutes holiday leave.

Duane Jackson, January 29, 2020