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Holiday Entitlement for Leavers

16/08/2016

All employees have the right to be paid for any untaken accrued holiday, when they leave your employ. In fact, this is the only time when an employee can be paid for their holiday without having to take the time off!

To calculate the employee's holiday entitlement, you need to establish the length of time they have worked in the current holiday year and divide this by 52 weeks.  You then multiple this amount by the annual holiday entitlement to get the number of days they have accrued. Don't forget to deduct from this amount any holiday the employee has already taken!

 

One of the most frequent mistakes, I come across when our clients do this calculation is not taking the bank holidays into account. If you give your employee's bank holidays as part of the overall holiday entitlement then the calculation you do should include bank holidays and you should then deduct the number of bank holidays that have occurred in the current holiday year, from the outstanding entitlement as well. 

Don't forget, if your contracts of employment give you the right to do so, you could make the employee take their remaining holiday entitlement during their notice period, this way you are not paying anything extra.  This can also be applied when someone is on garden leave!

If you have the situation, whereby the employee has taken more holidays (including the bank holidays) than they are entitled to and your contracts of employment give you the right to do so, you can deduct the overpayment from the employee's final salary/wage payment.

Fiona Haworth. You can contact Fiona on fiona@practical-hr.co.uk


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