With a leap year just around the corner there is good news for UK employers though not so good for employees.
The extra day in 2016 means an extra unpaid day of input from salaried employees across the UK equivalent to costs savings / extra unpaid input for employers of £1.92bn
HMRC also benefit too, by around £292m through the leap year peculiarities. Whereas salaried employees will not receive any extra pay, hourly paid workers will be paid for that extra day input. Having already used all of their “tax free” personal allowance during the normally worked days in the year hourly workers are taxed in full on their leap day earnings amounting to a boost for George Osbourne’s tax takings.
So good new for Employers and HMRC but employees are left either working a day for free or being taxed on every penny they earn on the 29th February.
How do we get to the figures?
The ONS reports that the UK average salary at Nov 2015 stands at £27,531.
After allowing for a 5 day working week and assuming minimum holiday entitlement employees in the UK work for 232 days each. So employees on average earn £118.67 per day worked.
There are, per ONS, 26,586,645, employees in the UK but statistics on the proportion of those that are salaried or hourly paid are difficult to find. However, assuming the 146,000 employees paid per annum by payroll outsourcing business Dataplan are representative, 53.4% of UK workers are salaried.
The employers boost then becomes 53.6% of 26,586,645 multiplied by £118.67 and multiplied further by the Employers NI saving through the free input of 13.8%.