Calculating Holiday with an atypical contract

Most weeks we get a request to help calculate holidays often with atypical contracts. In terms of staff queries, holiday entitlement is up there at the top of the list when it comes to staff querying with their employer whether the employer has got it right or not. As an employer you always want to know you have! It can be more challenging where atypical contracts are involved. These are defined as contracts that are non standard, such as term time only or part time.

Here’s my little guide to calculating holiday entitlement with the more common atypical contracts we see.

1. Zero Hours Contracts

With these we recommend you pay holiday in addition to wages as and when someone is paid. Where the statutory entitlement of 28 days or 5.6 weeks is to be applied, this is best calculated as 12.07% of hours worked.

2. Where someone works days that are not of equal length

Where you have a part timer working 5 days a week so long as their days are of equal length, then they are still entitled to 28 days. Where someone has a work pattern that means they do not work the same number of hour each day, it is best to calculate their entitlement in hours.

For example:

Sam works 16.5 hours a week over 5 days, but she works 5 hours on a Monday and Tuesday, 3 hours on a Wednesday 1.5 hours on a Thursday and 1 hour on a Friday. She doesn’t like having Friday’s off as she loses a day’s holiday but is only paid 1 hour.

Sam’s entitlement is fairer if expressed as 16.5 hours x 5.6 weeks = 92.4 hours over the holiday year.

3. Where someone is term time only

In this case they are entitled to a pro rata holiday entitlement as they do not work all year. They work typically 38, 39 or sometimes 40 weeks. To calculate this we would take 39 divide by 52 to see what percentage 39 weeks represents of a all year round workers year. As they work 75% of the year we would give them 75% of the entitlement of 5.6 weeks which is 4.2 weeks.

We hope this helps you with your calculations.

For more advice on any aspect of HR management give us a call on 01527 909436.