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Holiday Pay

Recent judgements have ruled that remuneration including regular overtime, commission and work-related travel should be taken into account when calculating holiday pay. This has created lots of discussion but also lots of uncertainty. This document tackles the basics and looks at what you may want to do as an employer to prepare for the legislation.

Our standard solution

Our payroll technology already has very rich functionality that can be configured to achieve very smart holiday pay calculations; something we believe is unique in the market.

  • It will calculate the average pay on basic plus extras (as defined by you) for hourly and extras only for salaried

  • The new calculation will be paid from 12 weeks (3 months) after set-up i.e. we will not calculate the previous 12 weeks (3 months) as the earnings history will need to be built up

  • You will need to define what pay elements you want to be included into the calculation. SD Worx cannot define this on your behalf

What it does not include

  • Any changes to bespokes you may have (e.g. costings and interfaces)
  • The control of the calculation to be paid after a set number of days of holiday
  • Doesn’t automatically pay holiday from holidays added in Central HR or Workforce Management

If your rules are more complex and you want to pay the new calculation straight away, you may need our enhanced solution. This will need to be set-up by our experienced consultancy team at our normal consultancy rates.

At a glance

Holiday Pay at a Glance
Requirement Standard Enhanced solution
Calculation based on basic pay plus extras Y Y
You define what extra pay is (i.e. what elements to include) Y Y
Calculate average from 12 (3 months) after go live Y Y
Load back dated earnings to pay average from day of go live N Y
Control calculation to be paid (after a set number of days of holiday) N Y
Calculate based on return from maternity leave N N
Automatically pay based on holidays added in workforce management N N
Automatically pay based on holidays added in Central HR N N