Solution required for Calculation of UK Holiday Pay

Summary

Looking for advice from other UK Cloud Payroll clients for the calculation of UK holiday pay, specifically capping additional pay at 20 days.

Content

Calculation of UK Holiday Pay (Doc ID 2097330.1)

The original European Working Time Directive entitled workers to 4 weeks annual holiday with pay. The UK then introduced the Working Time Regulations which added a further 1.6 weeks, which is intended to cover public holidays. There are 8 standard public holidays in the UK so, effectively, most workers have 4 weeks statutory holiday plus 8 public holidays. Employers can then give further contractual holiday if they wish.

There have been a number of recent rulings relating to the calculation of holiday pay, including a ruling that guaranteed and non-guaranteed overtime must be taken into account when calculating holiday pay. (N.B. This does not include voluntary overtime). However, it is important to note that this only applies to the 4 weeks holiday allowed under the original Working Time Directive, not the additional 1.6 weeks given under the UK regulations. It also excludes any additional contractual holiday pay. Employers will need to decide whether they pay a different rates for the 4 weeks, or whether it is more cost-effective