Rolled-up holiday pay ensures that employees with irregular hours or patterns receive their holiday pay spread across each pay period, rather than as a lump sum when they take their leave.
This method complies with legislation requiring holiday pay to reflect regular earnings, including overtime and bonuses, by adding a proportionate amount to each payment.
Set up rolled-up holiday pay
Create a percentage-based pay code: Create a new percentage based pay code using the pay code wizard. This should have a percentage of 12.07% to reflect the statutory calculation for allocating holiday pay.
Set up the pay code formula: When setting up the pay code specify which earnings should be considered for the holiday pay calculation. Typically, this includes all basic pay codes and any overtime pay codes. These selections ensure that the rolled-up holiday pay reflects an employee's regular earnings.
Assign to employees: Assign the pay code to your employees. Each pay period, a percentage of the designated earnings will be automatically calculated and added to their pay as rolled-up holiday pay, ensuring compliance with the legislation.
Manage Absences
To account for absences and ensure accurate holiday pay calculations:
Download the Insight report: From the Insight report store, download the 'Irregular Paid Employees - Absence Holiday Pay Calculation' report. This report helps identify employees absent during the current pay period and provides a detailed history of their earnings over a specified period (e.g., 52 weeks) for accurate calculation.
Override ralculations: With the report's information, you can manually adjust the rolled-up holiday pay for absent employees, ensuring their holiday pay reflects their average earnings accurately.
XD Workforce Management
WFM have introduced a New Holiday Entitlement Accrual screen to allows UK customers to set up Accruals for Irregular hour workers where employees accrue leave to book time off.
Enhanced holiday pay calculation: We recommend you set up the enhanced holiday pay calculation feature, ensuring that holiday pay is correctly calculated and disbursed when employees take their leave.