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Pro-rata holiday entitlement is an amount of holiday that’s in proportion to the holiday entitlement of a full-time employee. The proportion of holiday will depend on how much an employee works relative to a full-time employee. For example, if they work half as much, they are entitled to half as much holiday.
There are several scenarios where you might need to calculate pro-rata holiday entitlement and pay. We’ll look at each of these in this blog.
For salaried employees working fixed hours, calculating holiday pay is fairly straightforward. They simply receive their usual pay each month, regardless of whether they’ve taken some days off that month as holiday.
To calculate pro-rata holiday entitlement for part-time employees working the same number of hours each day, you’ll need to:
So, say your part-time employee works 3 days a week. This is 3/5ths of a full 5-day working week. This means they’re entitled to 3/5ths the amount of holiday as a full-time employee. Assuming you offer the statutory minimum paid holiday to your staff (i.e., 5.6 weeks, or 28 days), your part-time employee would be entitled to:
3/5ths of 28 days
(28/5 = 5.6. 5.6 x 3 = 16.8)
So 16.8 days holiday
While you can’t round down holiday entitlement, you may wish to round up to the closest full or half-day to make allocating the leave more straightforward. You don’t have to do this, though.
You should never round don’t, as this would deny your staff their full entitlement.
If you offer the statutory minimum paid holiday, another easy way to calculate how much paid holiday part-time workers are entitled to is to multiply the number of days worked per week by 5.6. So, for someone working a 3-day week, the calculation would be:
3 x 5.6 = 16.8 days
If your full-time employees are entitled to more than the statutory minimum, you must ensure that your part-time employees receive a pro-rata equivalent of that amount. For example, if your entitlement for full-time employees is 36 days, a part-time worker working 3 days a week would receive 3/5ths of 36 (3/5 x 36) = 21.6 days. This means they can take 21.6 days of holiday and still receive their usual monthly salary.
If an employee works days of varying lengths, holiday entitlement should be calculated in hours. Otherwise, an employee might take all their holiday on days when they work longer hours. To even things out, you should multiply the hours they work each week (rather than the number of days they work) by the number of weeks of holiday they are entitled to, to calculate their holiday entitlement in hours.
If you have an employee working 22 hours per week and offer the statutory minimum holiday entitlement of 28 days (5.6 weeks), the number of hours worked over 5.6 weeks (and therefore how much holiday they would be entitled to) is 123.2 hours (22 hours x 5.6), which you may wish to round up to 124 hours.
For individuals whose hours vary, such as casual employees with no regular hours or zero-hours workers, calculating their holiday entitlement in advance is complicated by the fact that their irregular working pattern makes it impossible to predict how many hours they will work over a year.
However, as a result of recent changes in legislation, for leave years beginning on or after 1st April 2024, it’s now permissible to calculate a casual or zero-hours worker’s holiday entitlement by multiplying their working hours by 12.07%. This is equivalent to 5.6 weeks’ holiday on an annual basis. The calculation is based on the relationship between working weeks (46.4) and holiday weeks (5.6) in a holiday year for a full-time worker (5.6 divided by 46.4 = 12.07%).
The change in legislation also makes it possible to pay a casual or zero-hours worker’s holiday pay as it is accrued, as an addition to their weekly or monthly pay of 12.07%.
Another way to approach holiday for casual and zero-hours workers is to calculate their entitlement on an accrual basis. We recommend that you review at the end of each holiday year (and at the end of a contract) to check that workers have had and been paid for the correct amount of holiday.
John is a casual worker for Jones Limited. He is entitled to 5.6 weeks of paid holiday each year. John has been working for Jones Limited for 12 weeks and has worked 125 hours so far. He wants to take some holiday next week. The calculation will be:
125 (hours worked) / 12 (weeks) = 10.42 (average hours worked per week)
10.42 (hours) x 5.6 (weeks) = 58.35 (annual holiday entitlement based on hours worked so far)
58.35 (annual hours entitlement) / 52 = 1.12 hours accrued each week
1.12 x 12 (weeks worked) = 13.46 hours holiday leave accrued over the twelve weeks worked
This means John is entitled to 13.46 hours of paid holiday. Provided he gets paid the same per hour worked, he’ll get 13.46 hours’ worth of pay while on holiday. But what if he gets paid different amounts for different hours? For example, perhaps he gets paid more for the hours he works on a Sunday or receives overtime or commission payments. In this scenario, we’ll need to work out how much an employee earned over the previous 52-week period to work out an average rate of pay. If they didn’t earn anything one week, this week should not be included in the calculations, and the 53rd week should be used instead (i.e., the calculation should only be based on the last 52 weeks of employment in which the employee was paid).
John’s total gross pay over the previous 52 weeks is £11,158. This means his average weekly pay is £214.58 (11,158 / 52). If he takes one week’s leave, he receives £214.58. If he takes two days’ leave, his weekly pay is divided by five and then multiplied by two, amounting to £85.83. Alternatively, to calculate in hours – divide the total pay by the number of hours worked to get the hourly rate (£11,158 divided by 125 hours = £89.26 per hour). This means John should receive £89.26 for every hour of holiday taken.
Note that following recent changes in legislation, casual and zero-hours workers may accrue holiday pay during family and sick leave. The rules on this are complex and are not included in the example for simplicity.
In this situation, the most accurate approach is to calculate the average weekly working time over an appropriate period of weeks. This should be possible where there is a rota system. For example, Jones Limited has workers on an eight-day cycle, working two 12-hour day shifts, followed by two 12-hour night shifts, followed by four days off. In the first four weeks of this cycle, they are working four days per calendar week, but in the second four weeks, they are working three days each calendar week. As each worker is doing an average of 3.5 shifts over an eight-week period, they are entitled to 19.6 shifts of annual leave each year (3.5 x 5.6).
As this calculation will often result in a fraction of a shift, it may be easier to calculate the holiday entitlement in hours. Here, each shift is 12 hours, so the annual holiday entitlement would be 235.2 hours (19.6 shifts x 12 hours). A calculation based on hours is also particularly useful where the length of shifts varies during the year.
Term-time workers should receive holiday entitlement on a pro-rata basis compared to staff who work throughout the year. For a typical 39-week term-time contract, this would work out at 4.7 weeks’ holiday per year. You can designate periods during the school holidays to be the term-time worker’s annual leave and pay holiday pay in instalments over the year.
Where a term-time worker has regular hours during term time and their salary is paid in equal instalments over the year, to ensure that they are receiving the minimum statutory paid holiday, you can add 4.7 weeks to the number of weeks the employee is contracted to work during the year, before averaging their pay out into equal instalments.
For term-time workers with irregular hours, you can still pay holiday pay in instalments over the year (for example, monthly or at the end of each term) ensuring that it amounts to at least 4.7 weeks’ pay.
However, following recent changes in the law, it may be simpler to use the 12.07% accrual and payment method set out above for casual and zero-hours workers, as this method can also apply to “part-year” workers. This would also apply to any workers who do seasonal work.
If you need to calculate holiday entitlement for an employee starting partway through your holiday year, you’ll need to work out what proportion of the year they will be working for you, and multiply this amount by the entitlement for a full-time employee.
Let’s assume you have an employee starting exactly ¼ of the way through your holiday year. This means they’ll be entitled to ¾ of the full-time annual holiday entitlement. Working with the statutory minimum of 28 days, this means they’ll be entitled to 21 days of holiday (28/4 = 7, 7 x 3 = 21) between the date they started working for you and the date your annual leave year resets.
HR software like ours has a built-in holiday entitlement and pay calculator, making those trickier pro-rata holiday calculations speedy, straightforward, and with far less chance of error.
The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use.
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