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Holiday entitlement can be difficult to calculate. There are so many variables to take into account; is the employee working full-time or part-time? Are they in a temporary position? Is the household giving them all bank holidays as paid days off, or only the statutory entitlement? And last, but not least: what does the term pro rata actually mean?
Holiday can only be taken as it has been accrued, so if your employee takes more time off than they are entitled to for the duration of their employment, you have the right to withhold a portion of their final salary as compensation. Stafftax will help with this calculation.
Part-time and temp employment
If your employee is employed on a temporary basis they are also entitled to holiday. The calculation of the holiday entitlement for someone in temporary employment in a full-time position is straight forward: divide 28 (the total number of days they would be entitled to if they were working the whole year) with 52 (the total number of weeks in a year). Then you simply multiply the answer with the number of weeks they have been contracted to work.
Example 1: Employee A has been hired to work for Employer B 5 days per week for 16 weeks:
24 / 52 = 0.54 * 16 = 8.6
The holiday entitlement for Employee A is 8.6 days.
If the employee is employed on a part-time basis in a temporary position the calculation is a little bit more complex. First you need to establish the annual entitlement if they were working the whole year. As before, you simply multiply the number of days they work per week by 5.6. Then you follow the steps as outlined in the calculation above.
Example 2: Employee C has been employed to work for Employer D for three days per week for 6 weeks:
5.6 * 3 = 16.8 / 52 = 0.323 * 6 = 1.9
Holiday entitlement for Employee C is 1.9 days.
|Introducing our legal service|
Your annual subscription to Stafftax entitles you to unlimited use of our Legal Advice help-line. We encourage you to make as much use of this service as you need to manage your domestic employment relations effectively. If you require clarification or advice about any employment issue, other than payroll, then please call or email the Legal Advice helpline.
The Legal Advice helpline is available to you as an employer and is not available to your employee as this may cause a conflict of interest. However, if you wish to make an enquiry to assist your employee, you may call on their behalf.
What we do
Additionally, should you find yourself in a particularly difficult situation and need more help or support over and above that provided by your subscription, we can arrange for you to meet with a member of the legal team in person and for a special member’s rate they can help resolve the matter directly.
|Benefits in kind|
Benefits in kind are sometimes provided by the employer in addition to the employee's salary. They are often taxable benefits and must be reported annually as part of employee's gross earnings.
Who pays the tax?
Tax on benefits in kind is payable in arrears and is not reported until July following the end of the tax year. Sometimes it can take up to two years before payments are claimed by HMRC, and during the interim your employee can have moved from one job to another, leaving the new employer responsible for paying what can in some cases be a very large sum of money. If your employee is on a gross wage, however, then the tax is deduced from their gross income at their current rate of tax.
In addition to tax there may also be a Class 1A NI charge of 12.8% of the value of the benefit to be paid - the employer always pays this charge.
Examples of taxable benefits
NB: PLEASE NOTE THAT THIS LIST IS NOT EXHAUSTIVE.
Mobile phones are not considered a taxable benefit
Use of Car
Please note that the information and examples contained on this page are to be used as guidelines only. If you have specific questions please contact Stafftax.