2. Calculating Holiday

The Essentials 

Statutory holiday entitlement is currently 5.6 weeks (which equates to 28 days, if an employee works a five-or six-day week). 

Holiday for part-time employees is generally calculated on a pro-rata basis (i.e. 5.6 weeks at their part-time hours). 

Employees do not have a statutory entitlement to paid leave on public holidays and as such these days can count as part of the holiday entitlement, i.e. you can give an employee 4 weeks (20 days) holiday plus 8 public holidays, which equates to 28 days or 5.6 weeks.

 

Provided you give the required 5.6 weeks holiday, you can determine when these days are taken, e.g. allocating 8 days to bank holidays. 

Note: 5.6 weeks is the statutory minimum. You can give more holiday entitlement to employees if you wish, but this should be clearly set out in the contract of employment. 

Useful tip: Holiday entitlement of 5.6 weeks is equivalent to 12.07% of the hours worked. That is 5.6 weeks holiday, divided by 46.4 weeks (being 52 weeks - 5.6 weeks) multiplied by 100 = 12.07%. (The 5.6 weeks have to be excluded from the above calculation as an employee would not be present during the 5.6 weeks, and thus they do not accrue annual leave during this period.) 

Calculating Holiday Entitlement (see also Holiday Pay) 

There are various ways to calculate holiday entitlement depending on the working days, hours or patterns of employees. 

Set out below are some examples of how to calculate holidays for 5.6 weeks holiday entitlement. If your holiday entitlement is more generous than the statutory minimum, you should take this into consideration when making calculations. When calculating holidays in days, you should round up (to the nearest half day), not down. 

Useful tip: You can also use the Government holiday calculator to calculate holidays.

 

 

For a basic calculation of an employee's leave allowance, multiply the number of days they work in a week by 5.6. 

Example 1: an employee who works 5 days a week 

5 x 5.6 = 28 days annual leave per year 

Example 2: an employee who works only 4 days a week 

4 x 5.6 = 22.4 days annual leave per year (rounded up to 22.5 days)

Take the number of hours worked per week and multiply by 5.6, this gives you their total hours' allowance for the whole year. 

Example: an employee works 22 hours per week 

22 x 5.6 = 123.2 hours allowance per year (rounded up to the nearest hour = 124 hours)

(dividing this by 52 gives the holiday hours accruing per week, e.g. 123.2 ÷ 52 = 2.37 hours per week worked). 

As they take holiday, you can record the number of hours taken and deduct from their total allowance for the year. Remember to record any hours they take on a bank holiday if they are paid for the bank holiday. 

To work out the leave entitlement of an employee who works shifts, you need to calculate the average of their shifts. This can be done by calculating the average over 12 weeks or by calculating how many weeks it is until the shift repeats itself. 

With a 4 on 4 off shift, the shift will repeat itself every 8 weeks. Therefore, calculate the number of days actually worked over the 8-week period (= 28 days) and divide by 8 = 3½ days worked on average each week.

Example: if an employee works 4 12-hour shifts, followed by 4 days off (the continental shift pattern) then the average working week is 3½ 12-hour shifts. 

5.6 weeks x 3½ shifts = 19.6 12-hour shifts 

They would be entitled to 19.6 shifts of 12 hours as annual leave a year. This would generally be rounded up to 20 days. 

If an employee only works term time or part of the year, you need to calculate how many hours a week they work on average over the whole year, then multiply this by the holiday allowance. If the employee is defined as a part-year worker under the Working Time Regulations 1998 please see the guidance for holiday pay and entitlement for irregular workers and part-year workers.

Example 1: an employee works 40 hours a week for 40 weeks of the year and takes their holiday within the 40 weeks they are contracted to work. 

Step one: multiply their weekly hours by the number of weeks they work: 

40 hours x 40 weeks = 1,600 hours worked per year 

Step two: calculate the average hours they work each week. Do this by dividing by 52 weeks. 

1,600 hours ÷ 52 weeks = 30.77 average hours a week 

Step three: multiply their average hours a week by the holiday allowance: 

30.77 hours x 5.6 weeks = 172.31 working hours holiday allowance a year 

Step four: if you want to convert this into holiday days, then divide again by the number of hours per day that they work. 

172.31 ÷ 8 = 21.5 days

Their holiday needs to be taken WITHIN the 40 weeks they work. 

Example 2: an employee works 40 hours a week for 40 weeks of the year and takes their holiday at other times (e.g. during school holidays). 

First, do the calculation as per Step One above. In this case, the employee accrues holiday on the whole 1,600 hours that they work, so you have to add on the 12.07% holiday entitlement. 

1,600 x 0.1207 = 193.12 hours' holiday allowance a year (rounded up to the nearest hour = 194 hours)

If an employee starts working midway through a leave year, then you must calculate their entitlement as the proportion of a full year that they work. 

Example: an employee starts working on the 1st October and the leave year runs from 1st April to 31st March, what is their entitlement for the remainder of the year? 

Firstly, 1st October - 31st March = 25 weeks. The employee is working for 25 weeks of the leave year. To find the employee's holiday leave you need to divide 25 by 52 (to work out the proportion of the year that the employee works) and multiply by the holiday entitlement. 

(25 ÷ 52) x 5.6 = 2.69 weeks 

We then multiply the 2.69 weeks by the number of days per week that they work, e.g. for a 5 day a week employee it will be 5 x 2.69 = 13.45 days, for a 3 day a week employee 3 x 2.69 = 8.07 days etc. 

If an employee left the Company midway through a leave year, you would need to work out how much holiday they had accrued up to that point. This is very similar to the last calculation. 

Example: an employee leaves a Company on 30th September and the holiday year runs 1st April to 31st March. How much holiday have they accrued by the 30th September? 

Firstly, 1st April - 30th September = 27 weeks. The employee has worked 27 weeks of the leave year. To calculate the employee's accrued holiday leave, divide 27 by 52 and multiply by the holiday entitlement. 

(27 ÷ 52) x 5.6 = 2.91 weeks of holiday. 

We then multiply the 2.91 weeks by the number of days per week that they work, e.g. for a 5 day a week employee it will be 5 x 2.91 = 14.55 days, for a 3 day a week employee 3 x 2.91 = 8.73 days etc. 

If a member of staff works on a casual basis or very irregular hours, it is often easiest to calculate holiday entitlement that accrues as hours are worked. If the member of staff is defined as an irregular hours worker under the Working Time Regulations 1998 please see the guidance for holiday pay and entitlement for irregular workers and part-year workers.

The holiday entitlement of 5.6 weeks is equivalent to 12.07% of hours worked over a year. 

The 12.07% figure is 5.6 weeks holiday, divided by 46.4 weeks (being 52 weeks - 5.6 weeks). The 5.6 weeks are excluded from the calculation, as the worker would not be at work during those 5.6 weeks. 

Example: an employee who works 10 hours would be entitled to 72.6 minutes for the 10 hours of work. 

10 hours x 12.07% = 1.21 hours = 72.6 minutes. This is the equivalent of just over 7 minutes per hour. 

Therefore, by keeping an accurate record of how many hours they have worked each week you can calculate how much entitlement they have accrued on an ongoing basis. 

Note: Employees on periods of statutory leave (e.g. maternity/paternity/adoptive) or medical leave still continue to accrue holiday entitlement whilst they are absent.