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Help on Hand to Calculate Holiday Entitlement

There is help on hand for employers to calculate holiday entitlement. Whilst the changes made from 1st October 2007 were no doubt welcome to the many UK employees to benefit – the calculation of holiday entitlement by employers, particularly part way through their holiday year, has become even more difficult.

When the employer’s holiday year starts after 1st October 2006 and ends after 1st October 2007 this requires 2 separate calculations one for the old entitlement and another for the new. This does present a challenge. Good for mathematicians and people who dabble in spreadsheets but less appealing to a busy employer with sales and profits heading many of the issues they have to resolve.

The most recent increase in the minimum holiday entitlement (there is another increase due to take effect from 1st April 2009), takes the annual entitlement from 4 to 4.8 weeks – yes 4.8. When converted to days, based on a 5 day week the full annual entitlement is now 24 days compared with the 20 days which applied pre-October 2007. This entitlement is covered by statute and employers are expected to follow the rules and that employees are treated fairly or penalties will apply. It is equally important that employers do not calculate over the odds. This will please the employee but have an unhealthy effect on the employer’s profits.

The following table shows the entitlements both before and after 1st October 2007. The holidays are listed in the total days due for a year compared with the number of days your employee usually works in a week.

  Up to: 01/10/2007 From: 01/10/2007
For employees working a: Annual days due: Annual days due
6 day week 24 days 28.8 days
5 day week 20 days 24.0 days
4 day week 16 days 19.2 days
3 day week 12 days 14.4 days
2 day week 8 days 9.6 days
1 day week 4 days 4.8 days

Annual Days due

The entitlement calculation for an employee whose holiday year starts on 1ST October 2007 is relatively simple. The calculation becomes more involved when the due year spans the change date of 1st October 2007. It is also more demanding when making part year calculations for holidays due at, say the 29th week. In those cases this table is reduced to the level of a guideline only and a far more sophisticated approach is needed.

If you have access to an internet connection – help is at hand. The internet currently provides many calculators for an amazing variety of uses from calorie counting for weight watchers to calculating the pension you will receive when you retire. Amongst these are calculators expressly designed to help employers calculate holiday entitlement for their employees.

One particularly impressive calculator is on the Business Link site. On that page use the link How much annual leave is my employee due? which takes you to the first screen you need. Simply answer 4 questions and you have the exact total entitlement due for your holiday year. It takes just a minute or two and you can repeat the exercise if you want the answer for several staff. It certainly beats many other calculation methods and ensures accuracy and compliance with employment law.

Holiday Calculator
Payroll from £20 a month