Understanding Your Employee’s Holiday Accrual
It is the time of year when many of your employees will want to take annual leave. It is important to keep records of time requested and taken and manage your cover workers accordingly.
Working out your PA’s entitlement can be tricky, but we have a few helpful points to keep you on track:
If your PA works irregular hours i.e., you submit a timesheet every month then their Holiday Pay accrual will be shown on the bottom of their payslip, under HP Accrual to Date.
You will need to inform us each time your employee takes annual leave, and we can record this through the payroll on their payslip (you just need to include this information when you send in their hours to be paid).
The holiday value figure showing in the HP accrual indicates the amount in money they have left to take for the year up to the end of March 2023. If the figure shown is a negative amount, then this will show the pay they have received is greater than the holiday they have already accrued. (Your employee has taken more holiday than they have accrued so far this year).
It is not unusual for employees to show a negative amount early in the tax year if they take time off, however, please do keep an eye on this and do not allow employees to take large amounts of leave that they have not already accrued, as if the employee then leaves or changes their hours you would need to recoup this money from your employee. As a guide, each employee should have no more than 5.6 weeks per year, and this includes the bank holidays.
Please be aware that the amount of holiday pay due will change each month as it shows the leave accrued from April 2022 to March 2023.
To convert the amount of money shown in the HP accrual to hours of annual leave the employee can take, please use the following calculation:
You will need to take the HP Accrual to Date figure and divide it by the employee’s rate of pay to figure out how many hours of holiday are left/overtaken.
If your employee has an HP Accrual to Date figure of -£60.00 and they are paid £10 per hour, then this means they have overtaken their holiday by 6 hours. (-60/10 = -6 hours)
If the figure is £100.00 and your employee is paid £10 per hour, then this means they have 10 hours of holiday left to take before the end of the holiday year. (100/10 = 10 hours)
If your PA works regular hours i.e. you do not submit hours every month, then your PA is due 5.6 weeks holiday per year and you can calculate this by:
For example, if your employee works 10 hours per week the calculation would be:
10hrs X 5.6 weeks = 56 holiday hours per year
Please remember that it is the responsibility of the employer to manage their employees’ holiday time and to ensure that it is being taken appropriately. Narrating this on the payslip may help you to keep a record of leave taken by each employee and prevent any disputes later in the year.