Holiday pay - not sure if i've been paid correctly?

[JimmySon]

Back in the early 2000s when we took holidays we were paid our hourly rate x 8hours.
At some point probably between 2005-2010 this was then shifted to a 12 week average. Since overtime is not optional where i work & you regularly do 55-60 hour weeks you could actually get paid more over a weeks holiday than a standard working week. We were paid weekly and i would check the holiday pay and 99.9% of the time my workings was within £0.02 +/- of what the company paid me for the holiday rate.
All good so far.

A few years ago we shifted to monthly pay and i no longer checked whether the company had paid me correctly due to the extra work involved. We've recently been paid (a 4 week month which contained holidays/bank holidays in each of those 4 weeks) and i'm sure they've not paid me an average, not least because the daily rate they've paid me is the exact same in each of the 4 weeks. Since my working week varies from week-to-week how can this even be possible?

The person who used to do the pay now has an assistant. I spoke with this assistant who confirmed that they pay an average but they were far from confident in explaining this. They said 12 weeks, 13 weeks, some months are different to other months, sometimes they use X-amount, other times they use Y-amount. I would've thought the formula would be the same throughout?

The month in question contained 2 full weeks as holiday and the other 2 weeks contained some bank holidays in each. I got paid the same daily rate for each of those days. In the past when we were paid weekly, week 1's daily average would've been one amount, week 2 would've been an amount slightly different to week 1, week 3 slightly different to week 2 & 1 etc.

Just to check i'm doing it right (like i said, when we were paid weekly i was always within £0.02 +/- of the company, always), what i have always done is take the gross pay for each week for the 12 weeks prior to the week containing my holiday, divide this by 12 to give a weekly average. Divide this weekly average by 5 to give a daily average and it is this end figure that pretty much matched the company 99.9% of the time (when we were paid weekly).



Just wondering the situation regards holiday pay, especially monthly -vs- weekly, as i don't want to go saying how i think they've got it wrong if i'm the one who has.

[Amethyst]

Do they list it as a weekly or daily rate on your payslip ?


My other half's previous job used the average from the previous pay month - so if he took 4 days separately in one month he would get same for each day as it was based on the previous months average rather than the month leading up to the holiday day. Which I think sounds like yours - so last 3 pay periods average daily - so all 4 separate would be same as they were during the same month.

[ULA]

You must be paid the same amount when you’re on holiday as you’re paid when you’re at work – whatever your working pattern.

Holiday pay must include all types of overtime you usually work. If you only work overtime occasionally it does not need to be included.

Since it seems that overtime is a normal part of your work, I presume this means that you do not have a set ‘normal week’s pay’. Being on annual salary if you had normal set hours per week your weekly holiday pay would be your annual salary divided by 52. So instead your holiday pay should be calculated by taking your average weekly hours over the previous 12 weeks which are then multiplied by your average hourly pay for that period to give a week’s holiday pay.

Hope that helps in checking whether you have been paid correctly.

[JimmySon]

Sorry, you're losing me when you start talking about salary and set hours. I'm not being funny here (though with only words on a screen people often think others are just being awkward when there's simply just a misunderstanding) but that bit started to lose me.

My hours are not set. To give you an example i'll give you 6 continuous weeks at one point last year...

56.75hrs
58.50hrs
39.75hrs (this one is actually unusual - i'd actually booked a holiday day that week which is why the hours worked are so low)
57.50hrs
60.00hrs
51.00hrs

As you can see they vary quite a bit depending on the needs of the business.

You must be paid the same amount when you’re on holiday as you’re paid when you’re at work

In what sense? If one week i am paid £350 and the next week i am paid £400 (net) then there is no 'same'?

In case it matters i get an elevated rate of pay once i hit 40 hours.



Does it matter whether i am paid monthly or weekly when it comes to calculating holiday pay? The link i have used is https://www.gov.uk/holiday-entitleme...pay-the-basics

Basically i am on a zero hours contract (used to be 40 but they changed this 10 years ago). With that said i consistently do over 50 hours. I think it's just zero so that they don't pay an employee up for time they've not worked (back in 2008 everyone was put on short time and when i worked under 40 hours they had to pay me for 40 hours - very soon after this everyone was put on zero hour contracts but continued to work their usual hours).

These days we basically work from 7am-5:30pm weekdays and until 4pm on a Saturday so obviously we do more than 40 hours per week. Further time will come in by being required to start at 6:30am some days or having to work beyond 5:30pm some days (for summer: all days).


What i'm wondering is, now that we're paid monthly, can week 1 holiday pay be the same as week 2, week 3 & 4 when my hours vary so much?



As for AMETHYST's question: The holiday rate shows up on my payslip as a daily rate.

So let's say they have calculated my average to be £90 per day and i have taken 5 days holiday. For total it'll say £450 (gross), for units it'll say 5 and for rate it'll state £90.00.

[JimmySon]

Any takers?

My understanding of this is that whether you're paid weekly or monthly is irrelevant (i see nothing saying otherwise). So as we're paid monthly it doesn't matter, you just calculate the previous 12 weeks as you did before & work out an average.

So take my last pay for example - 4 weeks where each week had at least one lot of holiday pay on there.

Week 1 (end 16th Dec), you just calculate the average of the previous 12 weeks.
Week 2 (end 23rd Dec) - the 12th week that was used in the calculation for week 1 would become the 13th week (so therefore not used in the calculation for this week). Everything 'shifts along one' And the pay for Week 1 (end 16th Dec) actually then becomes part of the 12 week average as week 1 of the 12 weeks.
Week 3 (end 30 Dec) - again, everything 'shifts along one' so that the 12 week span starts the week beginning 1st October 2018 and ends the week ending 23rd Dec (12 weeks - our working week is Monday-Sunday).
Week 4 (end 6th Jan) - once again the 12 weeks just shifts along one.

So (just like when i was paid weekly and my calculations always matched the companies calculations) the holiday pay paid changes from week to week as my hours (& therefore pay) changes week to week. The holiday rate of pay should not in this case be the same in consecutive weeks.

Is there a reason why that is not the case and my understanding is wrong?

[ULA]

Since you are not on set hours i.e. you have regular overtime as part of your working week then this needs to be factored into the calculation of your holiday pay. This is done by taking your average weekly hours over the previous 12 weeks which are then multiplied by your average hourly pay for that period to give a week’s holiday pay. So each time you take holiday the reference period will change to the 12 weeks immediately preceding your holiday.

Please note that this way of calculating holiday pay is only applicable to the first 20 days of holiday, excluding bank holiday. So, if your company provides more than 20 days holiday not including bank holiday then the extra days will only be payable on your basic salary without the inclusion of overtime.

Hope that makes better sense and sorry to have caused any confusion.