Once the employee has been added to the holiday scheme they will start to accrue holiday for every period they work (based on having pay against one or more of the pay elements selected). The amount they accrue and their average rate is calculated as follows.
Accrue - A worker will accrue a fraction of an hour for every hour worked against the pay elements that have been selected against the holiday scheme
- For example if the scheme just has the pay element Basic Pay selected to be included and the worker works 8 hours against Basic Pay and 5 hours against Overtime, holiday will only accrue on the 8 hours
8 * 0.1207 (accrual rate) = 57.93 minutes accrued
Average Rate – This is all the qualifying pay earned in the reference period divided by the number of hours.
- For example if an employee earns £1200 over a 12 week reference period and works 120 hours the hourly rate calculation would be
1200 (total pay) / 120 (number of hours) = £10 (average hourly rate)