Payroll services for charities


Holiday Accrual for Zero Hour Contracts

Written by  Monday, 30 March 2015

Calculating Entitlement

As previously covered in my blog on zero hour contracts, some people think that these kinds of employment can be a way to exploit their workers. But just because an employee is on a zero hour contract that doesn’t mean they are not entitled to holiday pay.

As we all know, a worker is entitled to a full weeks’ pay for every week they take off as annual leave provided they haven’t exceeded their holiday allowance for the year. But how do you work out what a weeks’ pay is for a worker who doesn’t have a set income every week? And how do you calculate how much holiday entitlement your employee is due if they don’t have a set amount of hours they work each week?

To calculate the amount a worker is due for a weeks’ annual leave, you would average out the pay from their last 12 weeks’ of earnings and that is what you would pay the zero hour contracted employee for their weeks’ holiday.

To calculate the amount holiday a zero hours worker can take, you would take the amount of hours the employee has worked to date in the current holiday year and multiply them by 0.1207 to get the holiday hours due. For example, if an employee has worked 216 hours so far in this holiday year, they would be entitled to 26.07 hours annual leave.

A zero hours worker wouldn’t get an annual leave entitlement like a full time employee might get, full time staff get 5.6 weeks annual leave per year and some employers let their workers take that as and when they like so long as they don’t go over their 5.6 weeks or 28 days. If they were to leave their job part way through a holiday year, annual leave might be recouped from them if they have taken more days than their accrual allowed for.

In the case of a zero hours contacted worker, they would have to accrue any holiday before taking it because of the way it is calculated. It would be impossible to forecast an employees’ hours based on a zero hours contact, and so holiday entitlement can only be calculated post accrual.

For more information on zero hours or holiday pay please contact us on 0333 11 23456.

Carly Boyd

Carly started her career with Dataplan back in 2013 as a temporary admin assistant. Coming from a background in Graphic Design, she fell in love with payroll and worked her way up to Project Manager just 2 years later. Carly is currently involved in the massive undertaking that is setting up Auto Enrolment pensions, and continues to show her commitment to payroll by studying for her Payroll Management degree.

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