Ask Sheila - Archive
Sheila Scott OBE has now retired and therefore is no longer available to answer your social care questions. However, you might still find the answer you’ve been searching for down below.
How do you calculate annual leave when a member of staff leaves and what is half-day rounding?
I have been informed that holidays are calculated using the 5.6 weeks (28 days). I have also been informed that we can longer use the 12.07% accrual method for calculating holidays. How then do we accrue holidays upon termination? What is half-day rounding?
Thank you for your question. I spoke to our Employment law firm, Napthens as this is a complicated area and this was their response;
Calculating annual leave upon termination
In the first instance, review the employee’s contract to check whether there is a contractually agreed method in which accrued leave is to be calculated upon termination. If the contract is silent on this topic then you can use the recommended formula (A x B) – C
- A is the period of statutory leave to which the worker would have been entitled to the whole of the leave year in which employment ends.
- B is the proportion of the worker's leave year which expired before the termination date, expressed as a fraction.
- C is the period of leave taken by the worker between the start of the leave year and the termination date.
By way of a working example:
A worker's leave year runs from 1 January to 31 December. He leaves employment on 15 August (227 calendar days into the year) having taken 11 days' holiday during the leave year. As the worker was on a full-time contract for 5 days' work a week, this amounts to 2.2 weeks (2 weeks and 1 day) of his 5.6-week entitlement. The calculation is as follows: (5.6 x 227/365) - 2.2 = 1.283
He is therefore entitled to 1.283 times a week's pay
This same example could also be calculated based on days rather than weeks. The worker's overall entitlement for a year expressed in days is 5 x 5.6 = 28. The amount of holiday he has left on termination is (28 x 227/365) − 11 = 6.41. Therefore, the worker is entitled to 6.41 days' holiday pay.
Alternatively, you may wish to use the Government holiday entitlement calculator- https://www.gov.uk/calculate-your-holiday-entitlement
Accrued entitlement for leave purposes is rounded to the nearest half-day. This means:
- If an employee has accrued less than half a day of the holiday, you must round this up to half a day e.g. 11.32 days accrued the half-day round-up would be 11.5 days.
- If the employee has accrued more than half a day but less than a full days leave, you must round this up to a full day e.g. 11.56 days leave accrued will be rounded up to 12 days annual leave.
I hope this helps.
*All information is correct at the time of publishing.
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