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A Payroll Solution For Holiday Pay Complexities

A Payroll Solution For Holiday Pay Complexities
Alison Clynes
Written by Alison Clynes
Tuesday, 25 May 2010 23:00

As administrators of payroll services are aware, all employees are legally entitled to a number of fully-paid days off work. These are the Statutory Bank Holidays, as defined by the Government and varied occasionally. Not everyone takes a holiday on Christmas Day - hospitals and emergency services, for example, must carry on, but employees agreeing to work on these days are entitled to time off in lieu.

Additionally, employees are entitled to further days paid leave, taken at their convenience after consultation with the employer. These extra days, together with the Statutory Bank Holidays, comprise the employee's annual holiday entitlement, and this needs to be accounted for in payroll solutions. From 1st April 2009 this increases from 4.8 weeks (24 days) to 5.6 weeks (28 days). Annual Leave for part-time staff is calculated pro rata. New employees joining the workforce part-way through the year also have holiday entitlement calculated proportionally to the amount of working year left. Naturally, this calls for professional implementation of tried and true payroll solutions.

Employees leaving part-way through the year are only entitled to holiday pro rata to the length of the year employed. If they cannot take their full holiday entitlement before leaving post, they can be paid in lieu. If they have already taken holiday exceeding the pro rata amount they are now entitled to, wages for these days can be reclaimed from the final payment. Some employers grant staff further annual leave exceeding these requirements which can vary in-house.

We at Dataplan Payroll know that administering holiday pay is a complex affair, which is why many businesses choose us as their provider payroll outsourcing services.

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