Scratching your head over holiday pay calculations?
Below, we'll demystify all of the intricacies of holiday pay for part-time employees in the UK, shedding light on the calculations, regulations, and considerations you need to be aware of as an employer.
Part-time workers: how are they defined?
Here in the UK, part-time employees are categorised by HMRC based on their average weekly working hours.
As you'd expect, part-time employees work fewer hours than full-time employees, often on flexible schedules.
- Full-time employee: A full-time employee is someone who works on average 35 hours or more per week.
- Part-Time Employee: A part-time employee is someone who works on average fewer than 35 hours per week.
Holiday entitlement for part-time workers - are they eligible for holiday pay?
No matter what kind of contract they're on, all workers in the UK are entitled to paid time off.
When it comes to holiday pay, this is a statutory employment right for nearly all types of employees - HMRC doesn't make a distinction between part-time and full-time workers.
They both have the same rights to holiday pay.
However, holiday entitlement for part-time staff is calculated slightly differently than for regular, full-time employees.
Employees who work a regular, 5-day week get 5.6 weeks annual leave entitlement, which adds up to 28 days in total (5 days per week x 5.6 weeks).
5.6 weeks is statutory holiday leave entitlement and so is the absolute minimum you can offer. This means you can offer more days of holiday if you want to.
Part-time workers are also entitled to at least 5.6 weeks worth of paid holiday too.
However, this will mean the pro-rata amount will be less than 28 days.
Calculation of holiday entitlement for part-time workers is done on a pro-rata basis.
Annual holiday entitlement will be based on the number of days per week someone works.
This just means that your calculation will be based on the proportion of a full 5-day week that a person worked.
So if they're on 4 days a week, you simply do:
4 x 5.6 weeks = 22.4 days annual leave entitlement.
(Number of days per week worked) x 5.6 weeks = (annual leave entitlement)
If you need any additional help with this, you can always use HMRC's holiday entitlement calculator
For any new starters, you need to round up the decimal numbers.
And for the rest of your employees, you don't have to round them up - although this does make calculations easier!
Note: Discrimination based on someone's employment status (e.g. part-time or full-time) is strictly prohibited in the UK... and so you must ensure that part-time employees are not unfairly denied holiday pay benefits.
Bank holiday entitlements for part time employees
The rules around bank holidays are pretty much the same for both part and full-time staff.
Bank or public holidays do not have to be given as paid leave.
Whether or not someone has to work on bank holiday days is dictated by their contract of employment, so there are no hard and fast rules to play by here...
Industries like retail and hospitality, for example, are naturally going to have a higher demand for bank holiday workers.
If you are going to give workers bank holidays off, it's then entirely up to you whether you include them as part of their annual entitlement or add them on top of this.
How do you calculate holiday pay for part-time employees?
Once you have calculated a worker's annual leave allowance (using the formula above ☝️), you can then work their holiday pay by either:
- Using their salary (if they are salaried)
- Or the 52 week average (if they are variable paid)
Holiday pay calculation for salaried workers
A part-time worker's annual salary will be the total amount they earn in a year before any deductions.
You'd then need to get their daily rate, which can be done by dividing the annual salary by the number of working days in the year.
The number of working days in the UK can vary but is typically around 260 days, excluding weekends and public holidays (and for part time workers this will be relative to the number of days they’ve worked).
(Annual salary) / (number of working days) = (daily rate)
Next, you need to know how many days of holiday the part-time employee is taking... This could be based on their employment contract or the statutory minimum.
And so to get the holiday pay, you'd just multiply the daily rate by the number of holiday days.
(Daily rate) x (number of holiday days) = (holiday pay)
If you had a (salaried) part-time employee that earns £20,000 a year and is taking 10 days of holiday:
- Daily rate = £20,000 / 260 = £76.92 (approximately)
- Holiday pay = £76.92 x 10 = £769.20
The holiday pay for this employee would be approximately £769.20 for 10 days.
Holiday pay calculation for variable paid workers
Start by calculating the worker's average weekly earnings.
Add up the total earnings over the past 52 weeks - that's any money earned during this period.
And then divide this the the number of weeks in the reference period to get the average weekly earnings (which 52 weeks).
(Total earnings over 52 weeks) / 52 weeks = (average weekly earnings)
Then multiply the average weekly earnings by the number of weeks of annual leave entitlement.
This will give you the total holiday pay entitlement for the employee.
(Average weekly earnings) x (weeks holiday entitlement) = (holiday pay entitlement)
To calculate the holiday pay for a specific length of holiday, you can simply divide the total holiday pay entitlement by the days off the employee is taking.
If an employee's average weekly earnings are £400, and they are entitled to 5.6 weeks of annual leave, and they are taking a one-week holiday, the calculation would be:
Holiday Pay = (£400 x 5.6 weeks) / 5.6 weeks = £400
So, this employee would be entitled to £400 in holiday pay for their one-week holiday.
Want to take the hassle out of payroll? Pento supports any working pattern or type of worker
Pento is a payroll management solution that ensures People and Finance teams can run stress-free payroll without any errors by automating repetitive manual tasks, removing payroll deadlines, and offering expert guidance - no matter how complex your payroll is.
Why use Pento?
Pento is the only modern payroll solution in the UK that supports all your payroll needs - whether it be part-time, flexitime, 4-day weeks, zero hours or weekly pay!
- Automated salary and tax calculations
- No deadline - edit pay until payday
- Support from CIPP accredited payroll specialists
- Direct integrations with your favourite software
- Ultimate visibility, flexibility and control
- Easy to use
Holiday pay for part-time employees FAQ
Do part-time workers receive the same number of holidays as full-time employees in the UK?
Here in the UK, part-time workers are entitled to the same amount of paid annual leave as full-time employees on a pro-rata basis.
This means that their holiday entitlement is calculated based on the number of days they work.
So although they both get 5.6 weeks worth of statutory leave entitlement, a part-time worker's week is going to be shorter than that of a full-time employee, and so they'll get less than 28 days (which is 5.6 weeks x 5 days work per week).
Can employers deny holiday pay to part-time employees in the UK?
Employers in the UK cannot deny holiday pay to part-time employees.
Holiday pay is a legal entitlement for all employees, including part-time workers, and it is protected by employment law.
How do you calculate holidays for part-time staff?
Once you have worked out your worker's holiday entitlement (the number of days they work per week x 5.6) then you can work out their pay either using their salary or the 52 week average if they are variable paid.
Is the 12.07 holiday pay legal?
No, this is now unlawful. Holiday pay regulations in the UK mandate that employees are entitled to a minimum of 5.6 weeks.