All employees have minimum entitlements to annual leave. There are three steps when calculating how much holiday pay an employee is owed:
Work out the weekly average of your employee’s total gross earnings by dividing the “total gross earnings” for the 12 months before the end of the last pay period before the annual holiday by 52. This gives the “average weekly earnings”.
Note: “total gross earnings” means all salary, wages, overtime pay, allowances, commission, and any previous payments for holidays and leave in the period during which the earnings are being assessed.
Part-time workers also get paid holiday pay. You and your employee need to agree on what a week means for them. For example, if John works part-time 16 hours per week, you may both agree that John’s entitlement is calculated as 4 weeks of 16 hours, which is equal to 64 paid hours of holiday pay, or 8 days of paid holiday pay.