How to calculate pro-rata annual leave allowance

While most of your staff will have similar annual leave allowances, there are a couple of scenarios where you’ll need to calculate pro-rata holiday entitlements for particular. In this post, we’ll take a look at how to calculate pro-rata annual leave allowances and when it’s necessary to do so. 

What is the statutory annual leave allowance?

Before we work out how to an employee’s pro-rata annual leave entitlement, let’s establish what the statutory holiday allowance actually is. In the UK, the legal minimum amount of annual leave a company has to give their employees is 5.6 weeks or 28 days. This includes the UK’s eight bank holidays.

Now, how these 28 days are structured and offered to employees is at your company’s discretion. On one hand, you may choose to make the bank holidays mandatory, which means you only have to provide 20 days of holiday for an employee to take at their choosing. Alternatively, if your business is open on bank holidays, you might give your employees the full 28 days’ allowance and let them choose to take bank holidays off. 

However, while 28 days is the statutory minimum annual leave allowance, your company might decide to offer its staff more than this. Additional holiday is great way to attract top talent, in addition to rewarding loyal or hard-working employees. Extra annual leave is an excellent alternative to a higher salary and, better still, some staff prefer more time off over more money. 

How to work out pro-rata holiday for part-time staff

Part-time, temp, and casual workers are entitled to the same amount of annual leave as full-time employees, only pro-rated. The simplest way to work out the holiday entitlement for your such staff is to multiply the number of days they work each week by 5.6.

Let’s say, for instance, that you have a part-time employee works who three days a week. Using the above formula, their pro-rated statutory holiday entitlement will be 3 x 5.6, which works out as 16.8 – or 17 days. 

But how do you work out pro-rated rates if your company offers more than the legal minimum holiday entitlement? In such cases, you’d first take your total annual leave allowance and divide it by 5 (as in working days) – which gives you a number to use in place of 5.6.

So, for example, if you offer your employees 35 days of holiday a year, you’d first divide 35 by 5, which gives you 7. Then, using our previous example of a part-time worker that works three days a week, we’d work out their pro-rated holiday allowance, which is 3 x 7 = 21 days.

How to work out pro-rata holiday for staff that starts part-way through the year

The other common scenario for pro-rating an employee’s holiday leave is if they join your company partway through the year. Considering its unlikely that an employee will join right at the beginning of a year, this is a calculation you might have to make quite regularly, depending on how frequently you hire new staff.

For this calculation, you first need to establish is when your holiday year starts. Again, this is up to the company, with some most having an annual leave period that runs from January to December, while others opt for April – March (for the financial year). In either case, you can calculate how much annual leave a new employee receives by understanding that they accrue 1/12 of their holiday entitlement each month.

So, if an full-time employee with 28 days of holiday starts in May, and that company’s annual leave period runs from January to December, then (including May), they’ll be entitled to 8/12 of their allowance. Multiplying 28 by 8/12 gives you their new allowance of 18.67 – or 19 days.

If that new employee happened to be part-time rather than full-time, you’d need to work out their pro-rated allowance first and then apply the same formula to calculate what they have left for the year. Using our above example of someone working three days a week, we start with an annual leave allowance of 17 days. With that person starting in May, you’d then use a calculation of 17 x 8/12 to work out their new annual leave allowance of 11 (11.33) days.

You can also use our calculator by clicking here.

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