How to calculate holiday entitlement for part-time workers

Almost all full-time workers in the UK are entitled to 28 days’ paid leave. This is known as statutory leave and can include bank holidays also. But what about part-time employees?

Holiday entitlement calculations for part-time employees are a little more complicated, however, that’s where we come in!  We’ve created this guide to help calculate annual leave for your full and part-time employees, starters, leavers and shift workers.

Below we will explore the UK holiday entitlement system and provide a few handy holiday accrual calculator methods that will help you work out employee holiday entitlement.

A part-time employee is pro-rated to a full-time employee’s entitlement and is based around their working week. To calculate their holiday entitlement, use the following formula:

Weeks holiday entitlement x number of working days worked per week = Holiday entitlement in days

Examples of annual leave entitlement for part-time employees

Using statutory minimum entitlement of 5.6 weeks

If you plan to offer more vacation time than the legally required amount, make sure to provide a proportional amount to your part-time employees. Here’s an example: If full-time employees are given 33 days of annual leave, a person working four days a week should be allowed to take 26.4 days of vacation per year (calculated by 4 divided by 5 multiplied by 33, which equals 26.4).

As per legal regulations, rounding down an employee’s leave is not allowed. However, there is an option to round up their leave if desired, though it’s not mandatory. For instance, if an employee’s vacation days are 26.4, rounding it up to 26.5 is possible, but decreasing it to 26 is not permissible.

According to statutory provisions, employees receive a maximum of 28 days of annual leave. Even if they work 6 or 7 days a week, their vacation entitlement will still be limited to 28 days.

Bank and public holidays

It is worth remembering that the term bank or public holiday is not in our Working Time Regulation (WTR) laws.  This is known as Statutory Leave.  WTR is made up of 4 weeks under section 13, and then section 13A is country-specific, in the UK this is 1.6 weeks.

When it comes to calculating statutory leave entitlement, a week is considered as 5 working days regardless of an employees weekly work schedule for a full time worker. To determine the number of days an employee is entitled to under section 13, you simply multiply 5 by 4, which gives you 20 days. Meanwhile, section 13A grants 8 days of leave. Some contracts may include the 28 days as a whole, while others may list the 8 days of Bank Holidays separately. Additionally, some contracts may not specify the number of Bank Holiday days, which could potentially allow for additional days off if the government declares an extra holiday for state reasons (e.g. coronation). However, if the contract clearly states the number of Bank Holiday days, there is no legal obligation to grant additional days off under UK statutory leave should the government announce additional days. In this case, the employee would need to use their current allowance to cover the extra holiday.

Sometimes, there can be problems when part-time employees who work less than five days a week are obligated to take off bank holidays because the business is closed.  The majority of Bank Holidays fall on a Monday, and if the employee does work a Monday they will have to use a higher percentage of their pro-rated holiday compared to someone with another day of the week as their non-working day.

If you have established mandatory holidays on specific dates in your system, you may need to modify an employee’s statutory day if they work on that day. Their entitlement would need to have this day returned to them for it to then be booked at a later date.  If the employee does have this non-working day off then their balance will be correct at being reduced by one day.

A straightforward and just approach to calculating entitlements is to treat all holidays as a collective sum, and for the employee to request time off for each specific date. This method also helps maintain compliance with regulations.

How can you calculate holiday entitlement for hourly paid or shift workers?

Employees that are paid hourly or have no set hours of work (i.e. employees with a zero-hour contract) also qualify for the equivalent of 5.6 weeks of paid holiday. In proportion to the number of hours they work.

There is no legislation of how to convert the 5.6 or more weeks entitlement into days or hours for these workers, so employers are obliged to work this out in the fairest way possible to them. We would highly recommend seeking professional advice on this matter if you have any questions.

Calculating annual leave as a number of hours per year

In cases where an individual’s work hours vary from day to day, their holiday allowance may be stated as a number of hours per annum.

If your full-time employees receive a total of 33 days per year (25 days of annual leave and 8 bank holidays), the entitlement of a part-time worker who works 20 hours per week would be calculated as follows: 20 hours per week multiplied by 6.6, which equals 132 hours of holiday per year.

Again, this calculation includes the bank holiday entitlement.

If an employee who works part-time for 5 hours on a Tuesday and 7 hours on a Wednesday decides to take those days off as vacation, they will lose 12 hours from their annual entitlement.

How to work out holiday entitlement for new employees

Whether you’re calculating holiday entitlement for new starters or leavers; the process is a relatively simple one. Of course, the specifics of how you work out holiday entitlement will vary according to your company’s employment contract.

You either calculate this monthly, as detailed above or by the actual working days remaining in the holiday year.

To calculate holiday by the actual (i.e 365 days or 366 in a leap year) days in a year, simply work out the number of days between an employee’s start date and the end of the year. Then divide this number by 365 (or 366).

If an employee starts on 1^st September, there are 121 days between their start date and 31^st December. Assuming your holiday year runs from January to December.

Simply divide 121 by 365 (or 366) and multiply by 100 to arrive at the percentage of full holiday allowance this employee is entitled to.

121 / 365 = 0.33 x 100 = 33%

If your holiday allowance for a full year is 28 days, this employee’s entitlement is 33% of 28 days which is 9.24 days.

By law, you cannot round down the leave. It is at an employer’s discretion whether you round it up or not, but in this case, you may choose to round up the 9.24 remaining days to 9.5.

Alternatively, you can calculate holidays by the days an employee physically works in a year (i.e. 260 days). Simply work out the number of working days between an employee’s start date and the end of the year. Then divide this number by 260.

If an employee starts on October 1^st, there are 64 working days (excluding weekends and 2 UK public holidays.

Divide 64 by 260 and multiply by 100 to arrive at the percentage of full holiday allowance for this employee.

64 / 260 = 0.25 x 100 = 25%

If your holiday allowance for a full year is 28 days, this employee would thus be entitled to 25% of 28 days which is 7 days.

How do you work out holiday entitlement for leavers?

Assuming an employee’s holiday entitlement is 28 days per leave year, and an employee is leaving 90 days into the holiday year, you can calculate their entitlement using a similar formula to that of new starters.

To calculate holiday entitlement by the actual (i.e 365 or 366 days) days in a year, work out the number of days between the start of your holiday year and an employee’s leaving date. Then divide this number by 365 (or 366).

For example, if an employee’s leaving date is 31^st March and your holiday year starts on 1^st January, there are 90 days between these two dates. Simply divide this by 365 and multiply by 100 to arrive at the percentage of full holiday allowance entitlement for this employee.

90 / 365 = 0.25 x 100 = 25%

Assuming your annual holiday allowance is 28 days, this employee would have been entitled to 7 days. This is 25% of 28 days.

Bank holidays and any holidays already taken should be deducted from the 7 days they have accrued. If any holiday entitlement remains, this should be paid with their final pay. Equally, if the departing employee has taken more holiday than the days accrued, employers can reclaim these days as a deduction from their final salary.

You can also calculate holiday entitlement for leavers by the number of actual days worked (i.e. 260 days).

If an employee is leaving on 30^th September, they have worked 191 days so far this year. This excludes weekends and 4 UK bank holidays.

Again, simply divide this by 365 (or 366) and multiply by 100 to arrive at the percentage of full holiday allowance this employee was entitled to.

191 / 365 = 0.52 x 100 = 52%

If your holiday allowance for a full year is 28 days, this employee would have been entitled to 52% of 28 days which is 14.5 days.

Do you need help calculating holiday entitlement?

We know just how headache-inducing calculating holiday entitlement can be. That’s why we’ve made it simple with our HR software. Automatically calculating holiday allowances for new starters and leavers, Natural HR makes these tedious calculations a thing of the past. Get a free demo to find out how you can ditch these calculations for good.