Payroll Services – Holiday Pay and Overtime
When it comes to Payroll Services, especially outsourced Payroll Services such as ours, it is vital to keep up with the changes in payroll legislation to ensure everything runs smoothly.
In recent months, we have noticed that holiday pay on overtime is becoming an increasing problem as many companies are unaware that holiday pay is calculated on overtime as well now. So here’s a bit more detail on this topic.
In November 2014, the Employment Appeal Tribunal ruled that holiday pay should reflect non-guaranteed overtime. The key points that an Outsourced Payroll Service needs to be aware of are:
- Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker’s statutory holiday pay entitlement. However, currently there is no definitive case law suggesting that voluntary overtime needs to be taken into account.
- Commission should be factored into statutory holiday pay calculations.
- Work-related travel may need to be factored into statutory holiday pay calculations.
- A worker’s entitlement to holiday pay will continue to accrue during sick leave.
- There are different rules for calculating holiday pay depending on the working patterns involved.
- Workers must take their statutory paid annual leave allowance and can only be ‘paid in lieu‘ for this when their employment ends.
Our Outsourced Payroll Service Does All the Hard Work for You
If the above bullet points sound a little complicated or confusing, don’t worry, we’re here to manage your payroll for you, allowing you to get on with running your company. It’s our job to be 100% up to date with the latest payroll legislation and guidelines, including the area of holiday pay on overtime.
If you need help with your payroll and think an outsourced payroll service might be the answer, call us on 0121 422 0550 or contact us.