annual leave

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As we end one year and start to turn our thoughts to the next we will inevitably start planning out our year.  While 2020 was a year where very little went to plan we are all hoping that 2021 will be a year where we can spend time with our families and friends again. You may even be provisionally booking time off because we all need something to look forward to again.

If you manage staff, you will also need to manage their allocated time off.  You might also find that if you had to put staff on furlough they still accrued holiday which you may need to carry forward if they haven’t been able to take it before the year-end.

If you manage a team of full-time workers who only work Monday to Friday each week this is a relatively simple matter because their contract of employment will state that they are entitled to ‘x’ number of days of annual leave and whether or not this includes bank holidays.  The statutory minimum entitlement is 5.6 weeks (including bank holidays) which equates to 28 days paid leave for employees who work a 5 day week, but many employers choose to give their staff more than this.  I choose to give my staff the pro-rata equivalent of 22 days PLUS bank holidays but we all work flexible or part-time hours. 

So how do you pro-rata annual leave for part-time staff?  What happens if they don’t work the same number of hours each day?  Equally importantly, as the majority of bank holidays (usually) fall on a Monday, how do you ensure that the bank holidays are distributed fairly in a job-share when you have one employee who always works on Mondays and one who never does?

I find that converting the entitlements into hours rather than days helps significantly and I have a simple way of calculating and recording the pro-rata annual leave allocations below.  I then put all the bank holidays into a spreadsheet and allocate the hours the employee needs to take to cover each bank holiday, depending on whether it is a normal working day or not.  I then do the same to cover the leave that needs to be allocated for our office closure over Christmas.  The running total in the final column then shows how much annual leave the employee has remaining to cover another holiday they want to take throughout the year.  NB: Remember to convert the fractions of hours to decimal (ie, 15 mins = 0.25 hours, 30 mins = 0.5 hours and 45 mins = 0.75 hours)!

As a special bonus, my newsletter subscribers can download a copy of my spreadsheet which will do the calculations for you [here]. 

Formula: Pro-rata annual leave entitlement = PT weekly hours/5 (days per week) x FTE annual leave entitlement (in days) FTE bank holiday entitlement = Number of bank holidays x average daily hours Pro-rata bank holiday leave = FTE bank holiday entitlement x (PT weekly hours/FTE weekly hours)

Example One – Employee works 22.5 hours over 3 equal days (Monday, Tuesday and Thursday)

Pro-rata annual leave entitlement = 22.5 weekly hours x 5 weeks annual leave entitlement = 112.5 hours annual leave. FTE bank holiday entitlement = 8 bank holidays x 7.5 hours per day = 60 hours Pro-rata bank holiday leave = FTE bank holiday entitlement (60 hours) x (22.5 weekly hours/37.5 FTE weekly hours) = 60 x 0.6 = 36 hours of bank holiday leave.

Example Two – Employee works 17.5 hours over 3 unequal days (Tuesday, Wednesday and Friday)

Pro-rata annual leave entitlement = 17.5 weekly hours x 5 weeks annual leave entitlement = 87.5 hours annual leave. FTE bank holiday entitlement = 8 bank holidays x 7.5 hours per day = 60 hours Pro-rata bank holiday leave = FTE bank holiday entitlement (60 hours) x (17.5 weekly hours/37.5 FTE weekly hours) = 60 x 0.4667 = 28 hours of bank holiday leave (rounded up).