How to calculate employee holiday entitlements

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The question of how to calculate an employees holiday entitlement is one that employers often ask our payroll team. This short article explains whats involved.

When calculating employee holiday entitlements, the most important thing to understand is that all employees in Ireland are entitled to the equivalent of four weeks of paid annual leave per year. So, if your employees work the same hours/days each week, calculating their holiday entitlement is straightforward:

  • An employee who works five days per week is entitled to 4 five-day weeks or 20 days annual leave per year.
  • An employee who works four days per week is entitled to 4 four-day weeks or 16 days of annual leave per year.
  • An employee who works three days per week is entitled to 4 three-day weeks or 12 days of annual leave per year.
  • An employee who works two days per week is entitled to 4 two-day weeks or 8 days of annual leave per year.
  • An employee who works one day per week is entitled to 4 one-day weeks or 4 days of annual leave per year.

 

How to calculate holiday entitlements for part-time employees

For part-time employees or those who work variable hours, calculating holiday entitlements is more complex. There are two alternative approaches — either:

  • One-third of a working week for each calendar month in which the employee works at least 117 hours, or
  • 8 percent of the hours worked in the leave year, subject to a maximum of four weeks

Most businesses where employees work inconsistent hours use the 8 percent calculation. The employee is paid at their normal rate for time spent on annual leave. If an employee’s pay rate varies, their holiday pay is calculated as average pay for the 13 weeks immediately prior to taking the annual leave.

 

Need help calculating holiday entitlements?

Calculating the correct holiday entitlement and pay rate can be a complex and time-consuming task which is why many GroForth clients outsource this function to us. Our payroll services are cost-effective and focus on giving you with peace of mind by helping your business comply with employment legislation and keeping your employees happy. For details, please get in touch.

Nikki Johns, Payroll Manager

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