Holiday pay Holiday pay continues to be an administrative challenge for many payroll professionals. We must be mindful that holiday pay and holiday entitlement are totally separate and come with separate methods of calculation, meaning more room for error and non-compliance. In January 2023, the Department for Business, Energy and Industrial Strategy (BEIS), now the Department for Business and Trade (DBT), released a consultation around ‘ Calculating holiday entitlement for part-year and irregular hours workers ’. The CIPP held discussions with a vast number of members which fed into our consultation response; members can view this response here . It was apparent from the conversations that the majority of members were not calculating holiday entitlement, nor pay, compliantly, due to complex calculations required.
VIEW YEAR-ON- YEAR DATA
HOLIDAY PAY REFERENCE PERIODS
Holiday is calculated using 52-week reference period (up to 104 weeks for unpaid weeks)
48%
Holiday is calculated using 52-week reference period (max 52 weeks regardless of unpaid weeks)
23%
3%
Holiday is calculated using 12-week reference period
The results of this survey align to the conversations held earlier in 2023. Only 47.84% of respondents are compliantly calculating holiday pay.
Holiday is calculated using an alternative reference period
4%
WE MUST BE MINDFUL THAT HOLIDAY PAY AND HOLIDAY ENTITLEMENT ARE TOTALLY SEPARATE AND COME WITH SEPARATE METHODS OF CALCULATION
Holiday is not calculated using an alternative reference period
14%
21%
Other calculation method
24
Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%
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