You probably now know a lot more about holiday pay than you ever wanted to. It’s unlawful to pay rolled-up holiday pay, and it’s also incorrect to use 12.07% of pay or hours for holiday pay. To do it properly, and legally, you now need to record up to 104 weeks of weekly pay history and do a rolling 52-week average. You cannot use monthly pay s which is quite different. We have worked with clients on holiday pay since 2020 when the new legislation was introduced – and here are a few things we’ve learnt:
- Trying to do a holiday pay on a spreadsheet takes hours and hours and you’ll probably get it wrong. It’s a rolling calculation and that means it needs to be updated and recalculated every week, even if you’re running monthly payroll.
- The other consideration about holiday pay is you need to let workers take time off and that means you’ll need a way to automate booking and approval.
- The final thing we found is that it is payrolls problem and that means you have to do it in the payroll and not outside.
So how do you automate the new 52-week holiday pay law? The solution is to use mobile, cloud and automation:
- Workers log into the mobile and request holiday dates
- Managers approval requests
- And it’s all added to the payroll completely automatically with a full listing on the payslip with live pay it can be viewed before payday.
If you’re interested in automating holiday pay and being compliant, get in touch. We will be happy to share our experience, provide advice and talk about the options available.