The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.
Holiday pay calculations
Calculating holiday pay can be complex, as not all workers will have consistent working days and hours. Employers will also need to take into account any additional payments, like bonuses or overtime, which are regular and settled and should therefore be included in holiday pay calculations.
A worker is entitled to one week's pay for each week of holiday taken. The calculation is based on normal working hours and can include regularly worked overtime. Specific rules apply where a worker does not work normal hours or where their remuneration varies from week to week.
Workers whose hours are constant but whose pay varies:
The calculation of holiday pay for workers whose hours are constant but whose pay varies (for example, piece workers) is based on the average hourly rate multiplied by the normal number of working hours. For shift workers, where both hours and pay vary, the rate is calculated by identifying the average number of hours worked each week and multiplying this by the average hourly rate.
Workers who work irregular hours, and whose pay varies:
Most workers on zero hours contracts are entitled to holiday pay based on the number of hours they work. Where hours of work are variable it may be difficult to work out this entitlement. Recent law has changed the way zero hours workers’ holiday is calculated.
Current method:
Workers with irregular hours or zero hours contract patterns are entitled to a minimum of 28 days annual leave which should be paid at the normal rate of a week’s pay or, if pay is irregular, the average payment for the preceding 52 weeks.
Zero hours contract and similar workers are therefore entitled to holiday pay at their usual hourly rate multiplied by 5.6. Any weeks in which no remuneration was payable are excluded from the 52-week average. This means if, during the relevant period, there is a week in which no work was done (and so no pay received) the calculation must take into account an earlier week. If the individual has not worked for the organisation for at least 52 weeks, the calculation should be made from the time they have worked.
Employers can use the government website calculator to work out holiday entitlement.