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UK Payroll automatically manages holiday pay calculations. Holiday pay can be determined by the rate of pay for an employee's holiday based on your company's historical 52-week average, or by using rolled up holiday pay.
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The aim of the 52-week average holiday pay calculation is to ensure that employees receive the same amount of pay they would if they were in work and aren't disadvantaged by taking vacation. To begin this calculation, employers must average 52 weeks of historical data of a worker's pay. Holiday pay calculations are relevant for salaried workers and workers without fixed hours or fixed rates of pay.
Hours worked by variable paid employees, and any other regular pay such as overtime, bonuses, and commission should also be included in this calculation.
You can also use rolled up holiday pay, which means that you'll pay your employees an additional amount on top of their hourly wage to account for their holiday entitlement. Rolled up holiday pay is typically used for employees with irregular hours.
How to set up holiday pay
- From the left side bar, select Employees.
- Select the relevant employee.
- Navigate to the Absences tab.
- In the Holiday pay scheme drop down, select the scheme you want to use to calculate holiday pay (None, Rolled Up or 52-week calculation).
FAQs
How can I set up 52-week holiday pay calculation?
Contact Support for help in setting up the 52-week holiday pay calculation if it isn't currently available to you.