30th Nov '23
All employees are entitled to annual leave. But how much? This blog explains everything you need to know about calculating annual leave pro rata for your employees.
All employees including part-time workers are entitled to annual leave, and the amount they can take often comes down to their employment contract.
Annual leave gives employees time off work and is a vital element in a healthy work environment. For companies across the UK, there is also a legal obligation to offer a minimum of 20 days to workers. Many choose to offer more and the companies that value the importance of annual leave often benefit from a happier, more productive, and more engaged workforce.
This article will explore the intricacies of annual leave for part-time workers and how you calculate it on a pro-rata basis.
When calculating payroll and holiday allowances, it’s essential to get it right for compliance reasons and employee morale. This process includes holiday entitlement for part-time workers, agency workers, staff with irregular hours, and those on zero-hours contracts.
All full-time employees and part-time workers are entitled to statutory holiday entitlement and holiday pay. For those working a five-day week, this equates to a minimum of 5.6 weeks of annual leave which is the equivalent of 28 days. This can include bank and public holidays and is at the discretion of the employer. Some employers may advertise their benefits as 20 days holiday, plus bank holidays, which is also correct.
In other words: 5 working days x 5.6 = 28 days’ holiday entitlement.
Like full-time workers, part-time workers are entitled to 5.6 weeks of statutory paid holiday. The difference is that for part-time workers, holiday entitlement is calculated in proportion to the hours that have been worked.
At this stage, it’s important to recognise the legal difference between part-time workers and full-time employees. In most circumstances, an employee will have a contract of employment with their employer. This provides the highest level of employment protection rights for the member of staff.
Meanwhile, workers, including those who are part-time, are likely to have fewer employment rights as set out in their employment contract. While there are key differences between these terms, part-time workers are still entitled to annual leave and holiday pay, though it may be less agreeable than full-time employees.
Calculations for part-time holiday entitlement are done pro-rata. This is proportionate to the hours a part-time worker has worked compared to full-time employees. For example, an employee working five days a week will be entitled to more holiday versus someone working only two days a week.
As previously stated, a full-time employee is entitled to a minimum of 28 days of annual leave because: 5 working days x 5.6 = 28 days.
Similarly, a part-time worker who works 2 days per week would be: 2 working days x 5.6 = 11.2 days of annual leave.
The table below provides a quick reference when calculating holiday leave entitlement for part-time workers.
|Days Worked Per Week
|Annual Leave Entitlement
|0.5 x 5.6 = 2.8
|2.8 working days
|1 x 5.6 = 5.6
|5.6 working days
|1.5 x 5.6 = 8.4
|8.4 working days
|2 x 5.6 = 11.2
|11.2 working days
|2.5 x 5.6 = 14
|14 working days
|3 x 5.6 = 16.8
|16.8 working days
|3.5 x 5.6 = 19.6
|19.6 working days
|4 x 5.6 = 22.4
|22.4 working days
|4.5 x 5.6 = 25.2
|25.2 working days
To help companies determine annual leave for full-time employers and part-time workers, GOV.UK has created an online holiday entitlement calculator. This provides a basic outline for holidays accrued but does not cover sick leave, parental leave, and other individual circumstances that may affect annual leave allowance. Similarly, many companies use payroll software to calculate holiday entitlement for them. This ensures mistakes and human errors are avoided and full compliance and accuracy are met at all times.
Shift calculations and hourly calculations are used to determine holiday entitlement for employees on specific working hours such as a 25-hour weekly contract. Using these formulas will provide an accurate reflection of pro-rata holiday entitlement for this group of workers.
To calculate the correct annual leave entitlement for shift workers, simply multiply the number of shifts worked per week by 5.6.
For instance, a hospitality worker has a 5-hour shift, 3 days per week, meaning they work a total of 15 hours.
3 days x 5.6 = 16.8
Therefore, the worker is entitled to 16.8, 5-hour shifts off work as part of their holiday entitlement.
Take the hours a person worked during the week and multiply it by 5.6. This will give you the number of hours the person has accrued as their annual leave entitlement.
For example, a supermarket employee works 25 hours per week.
25 hours x 5.6 = 140 hours.
Therefore, the employee receives 140 hours of annual leave entitlement per year.
Part-time workers and full-time workers should receive equal treatment regarding bank holidays.
In the UK, there are 8 bank holidays every year as standard, most of them occurring on a Monday. Where a part-time worker isn’t scheduled to work on a bank holiday, they may receive fewer days for their overall annual leave entitlement.
Some businesses and organisations offer bank holiday entitlement on a pro-rata basis. In this case, part-time workers receive the correct number of holidays they’re entitled to. This may also be why you see employers offering 20 hours plus bank holidays as part of business perks in a job advertisement.
UK employers should give full-time employees time off for bank or public holidays, but there is no legal requirement to give them it as paid leave. An employer could incorporate bank holidays into someone’s statutory annual leave.
Similarly, there is no legal obligation on companies to give part-time workers time off for bank holidays. When a company closes on a bank holiday, a part-time worker may have to take it as paid leave if they were scheduled to work that day.
It may also be that part-time workers are required to work during bank holidays as defined in their employment contract. This is a common occurrence in the retail, leisure, and hospitality industries which rely heavily on their part-time workforces.
An employer can include the standard 8 days of UK bank holidays in an employer’s statutory allowance of 28 days’ annual leave. In this instance, an employer would receive 20 days plus 8 bank holidays of annual leave.
Alternatively, some employers may not include bank holidays as part of holiday entitlement. When this happens, full-time employees often receive more days of annual leave. When this scenario applies, an employee may receive 31 days of annual leave consisting of 23 days plus 8 days of bank holidays.
Staffology’s comprehensive HR and payroll software solutions provide companies with all the support they need to accurately calculate annual leave entitlement for their full-time employees and part-time staff. Book a free payroll software demo with Staffology today.Duane Jackson, November 30th, 2023