Pro Rata Holiday Entitlement - How is it calculated (for late starters)?

[Armageus]

Random one, but having compared the governments online pro rata calculator vs the in-house developed system we use I've found a discrepancy.

The only problem is I can't work out how the government calculator gets to the answer.

Full time employee = 28 days holiday
Holiday year runs: 01/04/24 to 31/03/25
Employee start date: 23/09/24 (189 days left of the holiday year)

Based on my calculations they should get 14.5 Days holiday
28/365 * 189 = 14.49

However the government calculator is coming back with 16.5 Days?

Outcome - Calculate holiday entitlement - GOV.UK

www.gov.uk

 

[Freakbro]

Random one, but having compared the governments online pro rata calculator vs the in-house developed system we use I've found a discrepancy.

The only problem is I can't work out how the government calculator gets to the answer.

Full time employee = 28 days holiday
Holiday year runs: 01/04/24 to 31/03/25
Employee start date: 23/09/24 (189 days left of the holiday year)

Based on my calculations they should get 14.5 Days holiday
28/365 * 189 = 14.49

However the government calculator is coming back with 16.5 Days?

Outcome - Calculate holiday entitlement - GOV.UK

www.gov.uk

Because the Govt calculator starts from the 1st of the month they started, irrespective of the date they actually started. So 23rd Sept is taken as 1st Sept and their calculation is 28/12 * 7 = 16.33 = 16.5 rounded up.

Holiday entitlement calculator – calculations made easy | Moorepay

Calculating holiday entitlement can be complex. Use this formula to find out how to do complex calculations easily.

www.moorepay.co.uk

What happens when someone starts or leaves part-way through a month?​

The government’s calculator counts the month they start (in its entirety) towards their holiday allocation. So if someone starts on the 1st, 15th or 31st of March, and their annual leave year starts on 1st January, gov.uk gives them 10 months or 23.5 days holiday entitlement regardless.

After 30 years of doing payroll, I didn't know the Govt calculator did that, I don't know why the Govt claculator does that and I'd use the 14.5 just as you did.

Edit : To test that, I've just changed your employee start date to 1st Sept and yep, the Govt calculator still says 16.5

 

[Armageus]

Because the Govt calculator starts from the 1st of the month they started, irrespective of the date they actually started. So 23rd Sept is taken as 1st Sept and their calculation is 28/12 * 7 = 16.33 = 16.5 rounded up.

Holiday entitlement calculator – calculations made easy | Moorepay

Calculating holiday entitlement can be complex. Use this formula to find out how to do complex calculations easily.

www.moorepay.co.uk

After 30 years of doing payroll, I didn't know the Govt calculator did that, I don't know why the Govt claculator does that and I'd use the 14.5 just as you did.

Edit : To test that, I've just changed your employee start date to 1st Sept and yep, the Govt calculator still says 16.5

That's absolutely bonkers (that it starts from the 1st of the month), but a relief that I'm not going mad

I don't know why the Govt calculator does that

I can only assume whoever coded it didn't know about Julian numbers for dates, as that makes it trivial to calculate days between two points

 

[mattyg]

We've been using the GOV website too.
So whats the best way to work out Part timers. Zero hour contract. Who work different number of hours each week.

 

[Freakbro]

We've been using the GOV website too.
So whats the best way to work out Part timers. Zero hour contract. Who work different number of hours each week.

The easiest way is using the 12.07% method.

So add up the number of hours per month/quarter etc then x 12.07% = Their holiday entitlement in hours x hourly rate = Hol Pay

The more involved (and slightly more accurate way) is to work out their entitlement based on how many hours they have worked on a rolling 52 week average (ignoring any weeks they didn't work) and work their hourly pay rate over that period as well, as it could well of changed over the year.

 

[mattyg]

The easiest way is using the 12.07% method.

So add up the number of hours per month/quarter etc then x 12.07% = Their holiday entitlement in hours.

The more involved (and slightly more accurate way) is to work out their entitlement based on how many hours they have worked on a rolling 52 week average (ignoring any weeks they didn't work)

Thanks Buddy,
You'd think our accounting software could work that out for us......But nope

 

[Freakbro]

Thanks Buddy,
You'd think our accounting software could work that out for us......But nope

There was a lot of kerfuffle over part-timer zero hour contracts holiday pay and a few years ago the Supreme Court ruled that the 12.07% method was illegal, here

Calculating holiday using 12.07% method unlawful for part-year workers

Voice on… Employment law, by Nicola Mullineux, HR-inform, provider of CIPD’s <a href="https://www.cipd.co.uk/membership/benefits/advice-support" rel="noopener noreferrer" target="_blank">employment law helpline</a>. Following a long-awaited Supreme Court judgment, some employers will need to...

community.cipd.co.uk

This is especially pertinent for part year zero hour contract workers (like in education where you only work term time)

But from Jan 24 they 12.07% has been brought back on the table but with some differences, here

New Holiday Pay 12.07% – not as easy as you think!

Many employers and even payroll professionals have welcomed what some claim is a return of the 12.07% holiday pay method of operation which was ruled unlawful by the Supreme Court as not meeting th…

payadvice.uk

The 52 week rolling average (ignoring weeks not worked) is to work out their average pay rate (not hours) afaik.