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Hi, I am currently in the process of setting up a new setting (pvi) and am a little confused as to how holiday pay works with staff. We are looking to employ staff for term time ie 38 weeks a year. We will be running a holiday club but intend to run this ourselves or offer it as overtime. Does anyone have any experience of this - what staff are entitled to and what (if any) we have to pay as don't want to fall foul of the rules right at the start ???


Many thanks

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We also run term times only. You need to pay holiday pay pro rata for the hours the staff work in term time.


You calculate it by taking the legal minimum holiday entitlement which is 5.6 weeks of a normal working week. This is equivalent to 12.07% of the hours the staff work overall over the year. The 12.07% figure is:

5.6 weeks' holiday, divided by 46.4 weeks (being 52 weeks - 5.6 weeks) multiplied by 100 = 12.07%

The 5.6 weeks have to be excluded from the calculation as the staff would not be present during the 5.6 weeks in order to accrue annual leave.


We run term time only, and employees are normally required to take all paid leave outside of term time. Paid leave during term time is only granted in exceptional circumstances, such as for compassionate leave on the death of a close relative.


We pay our staff throughout the year, so the monthly payment is based on 1/12 of the annual hours worked, plus a 1/12 of the holiday pay owing for the year. I know some other term time only settings pay staff for actual hours worked each month, and then specify which holiday weeks will be paid in the year. It is up to you which approach you go with.


Good Luck

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There are calculators on the HMRC web site that help with this..


We were also 38 weeks but decided that we would pay the full entitlement of 5.6 weeks holiday pay. Apart from making our life easier , we also saw it as some recognition for the low pay and unpaid hours which we all tried to avoid but could not find the income to pay more. It also needs stipulating when you will allow this to be taken.

It really is not an easy calculation.. well I never thought so.. and there are those little things like overtime should also be included in the hours worked for calculating holiday pay ..

We too paid over the 12 months.. but you have to say on a payslip which weeks are holiday pay so we used to have holiday pay for all of August and rest was at Easter.

Others pay by hours worked each month or week..

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We do term time too so we take staff weekly hours x 38 weeks then this figure is put into HMRC calculator which gives you holiday pay entitlement. This is then divided by 12 to give monthly hours, it is stated in our contracts how holiday pay is calculated and paid and I checked with our HR company and as its detailed in contracts we don't have to itemise it on wage slip (they say lol) anyway at end of each term we look at any overtime and pay any holiday pay accrued on this three times per year. For the holiday club I would just pay it as overtime and then offset the holiday entitlment at certain points for instance the pay day after holiday club.

For our bank staff we offset their holiday pay every three months, temporary staff are offset theirs on their final wage.

Holidays are to be taken in school holidays but requests can be made, no requests will be authorised Jan, July, Sep and they are made aware that it will be unpaid and will affect holiday entitlement pay. x

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