employee-holiday-entitlement-calculations

Holiday entitlement calculator

 25 Oct 2018

Employee turnover is inevitable within all businesses, employees will move on and new employees will take up those positions. It’s a cycle you will want to reduce through employee retention incentives but working out how much entitlement an individual has used or will be allocated isn’t as straightforward, especially when it happens during the holiday year.

The importance for understanding an employees usage or entitlement for payroll is whether a leaving employee is eligible to be paid their accrued annual leave or if they’ve used too much during their time in the holiday year and require a deduction on their final payment.

This simple guide and helpful calculator will assist in understanding how holiday entitlement can vary for employees.

National Holidays

Every company has the option whether to include national holidays within their annual entitlement or exclude national holidays. It is common for companies to utilise annual leave inclusive of national holidays when annual holidays can cross between holiday years.

A full-time employee with 28 days annual leave excluding bank holidays.

Monthly entitlement = Annual leave (days) / 12

Example A

28 / 12 = 2.33 days

This will be the basis of working out the amount of entitlement the employee can use or should have only have used. 

A full-time employee begins three months into the holiday year and the company is closing for bank holiday

2.33 x (12-3) = 20.97 days

2.33 x 9 = 20.97 days

This would then be rounded up to 21 days for the employee to use for the remainder of the holiday year. The 21 days which includes any bank holidays which then falls on one of their normal working days.

Let’s say your company's holiday year was the 1st of April to the 31st of March, and there is someone who was starting work in July 2018, given the calculation they will have the August bank holiday, Christmas Day, Boxing Day and New Year’s Day - a total of four bank holidays are taken out of their 21 days, leaving 17 days which can then be booked as annual leave.

In case the companies holiday was the 1st of January to 31st of December, then the person who begins in April 2018, will have Good Friday, Easter Monday, May Day, Late May Spring bank holiday, August bank holiday, Christmas Day and Boxing day, which would then be a total of 7 bank holidays out of their 21 days, leaving then 14 days which could be booked as annual leave.

If you don’t close for the bank holidays the calculation will still remain exactly the same, as all employees are entitled to minimum 21 days. 


Employees leaving 3 months into their holiday year - company closing for bank holidays.

To work out the number of days you were entitled to use

2.33 x 3 = 6.99 days

This would be rounded up to 7 days annual leave.

This Employee will have accumulated 7 days holiday, inclusive of any bank holidays which have occurred in the first three months of the holiday year.

The bank holidays plus the holiday that has been already taken out should then be deducted from the 7 days the employee accumulated. If there are any entitlement left, this should then be paid with their final salary.

If they have taken more than 7 days of the days accumulated, then you are entitled to reclaim the overpayment from the final salary. The same will apply even if the company does not close for holidays, the 7 days accumulated should still be deducted from the holidays, if they have taken any, and either pay for the remainder or recover the excess as above. 


Part-Time Employees

To calculate part-time employees which complete a specific number of days (for all examples, we will assume 5 working days is the standard).


Statutory minimum holiday entitlement for a part-time employee.

This will follow a similar calculation to the full-time employees, however, before rounding up to their entitlement, a final calculation to must be completed to work out their part-time entitlement.

If the employee is entitled to annual leave which is 20 holiday days and 8 bank holidays meaning a total of 28 days, then you can calculate by the amount of time per a week they fulfil compared to the full time (5 days).

One day a week

(28 / 5) = 5.6 days (Rounded up to 6 days)inclusive of any bank holidays which fall on one of their scheduled working days.

Two days a week

(28 / 5) x 2 = 11.2 days (Rounded up to 12 days)inclusive of any bank holidays which fall on one of their scheduled working days.

Three days a week

(28 / 5) x 3 = 16.8 days (Rounded up to 17 days)inclusive of any bank holidays which fall on one of their scheduled working days.

Four days a week

(28 / 5) x 4 = 22.4 days (Rounded up to 23 days)inclusive of any bank holidays which fall on one of their scheduled working days.


Entitlement for new employees and leaving employees part way through a holiday year

The same calculations by inputting the part-time statutory minimum annual leave


Handy Calculator

To help with quickly working out the amount of annual leave entitlement an employee has left or has used can be easily worked out following our simple calculator.