🎯 For admins and HR managers in the UK looking to set up leave.
All employees are entitled to 5.6 weeks of paid annual leave per year.
We work out the average weekly earnings and weekly worked hours/days for each employee.
Multiply that by 5.6 weeks to get the total entitlement for the year.
This differs from the percentage accruing rate because unpaid weeks will not be included in the average.
The calculation formula is as follows:
Total leave pay entitlement = 5.6 * (Total Earnings / weeks worked)
Total annual leave balance = 5.6 * (Total hours or days worked / weeks worked)
Which shifts are included in the calculation?
The calculation aims to include the previous 52 paid weeks' worth of shifts
If some of the weeks in the previous 52 are empty (no paid shifts), then worked weeks beyond that will be included to reach a maximum of 52 weeks, but never going back further than 104 weeks.
Only shift types that are selected in the account template will be considered as “worked shifts”.
If a week contains at least one paid shift (irrespective of length), that week will count as a paid week. For example, a week with 5 unpaid leave shifts will not be included but a week with 4 unpaid leave shifts and 1 normal paid shift will be count as paid, and that paid shift will be included in the average.
Start of week
End of week
What happens if the employee is hired mid-holiday year?
If an employee is only hired for a proportion of the leave year, the employee will only be allocated that proportion of the total entitlement (e.g., leave period starts 01/04/23 and hired date is 01/07/23, the employee will get ¾ of the total entitlement calculated).
At which rate does the employee get their yearly annual leave entitlement?
Total entitlement for the year will be an evolving average that is initially calculated from the first day of the leave year, so can go up or down after every passing day.
Employees will not have access to the total balance from the start.
The total leave balance will gradually trickle into the account on a day-by-day basis until the last day of the leave year at which point the entirety of the balance will have been added to the employee’s account.
Calculation is done as per this formula:
Balance today = Total entitlement * (days elapsed in leave year / total days in leave year). For example: 5.6 weeks * (61/365) = 0.94 weeks balance today.
The following example shows Employee 1 who works on average 20 hours a week for £10/h, earning on average £200 a week on working weeks. Their total entitlement for the whole leave year will be £1120 over 112 hours.
After 2 months: Employee 1 will have 19.02 hours out of 112 hours in their account
After 9 months: Employee 1 will have 84.69 hours out of 112 hours
After the whole leave year: Employee 1 will have 112 hours out of 112 hours
Employee 1 (who was hired before the start of the leave year) has worked 500 hours over 25 weeks in the last 104 weeks, earning a total of £5000
Total leave pay for this holiday year = 5.6 * 5000/25 = 5.6 * £200 = £1,120
Total hours of annual leave available = 5.6 * 500/25= 5.6 * 20 = 112 hours
Employee 2 has also worked 500 hours over 25 weeks, earning a total of £5000. However, they were hired on 30/04/22, 30 days into the leave year:
Days hired in leave year = (365 – 30) / 365 = 92%
Total leave pay for this holiday year = 0.92 * 5.6 * 5000/25 = £1027
Total hours of annual leave available = 0.92 * 5.6 * 500/25 = 102.7 hours
Employee 1 (who was hired at the very start of the leave year) has worked 80 days over 20 weeks in the last 104 weeks, earning a total of £6000
Total leave pay for this holiday year = 5.6 * 6000/20 = 5.6 * £300 = £1,680
Total days of annual leave available = 5.6 * 80/20 = 5.6 * 4 = 22.4 days
Employee 2 has also worked 80 days over 20 weeks, earning a total of £6000. However, they were hired on 01/07/22, 183 days into the leave year:
Days hired in leave year = (365 – 183) / 365 = 50%
Total leave pay for this holiday year = 0.5 * 5.6 * 6000/20 = £840
Total days of annual leave available = 0.5 * 5.6 * 80/20 = 11.2 days
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