According to the UK Working Time Regulations (1998), casual workers are entitled to 5.6 weeks of paid holiday each year, which is pro-rated based on the number of hours they work. This means that a casual worker who works irregular hours or has periods of no work is still entitled to paid holiday leave.
Calculating holiday pay for casual workers in the UK can be more complex than for other types of workers, as their working hours and pay may vary from week to week. HMRC introduced in 2020 a new regulation stating that employers should gather 52 weeks of pay data to determine the average salary for holiday time off. This means that holiday pay should be based on the average income earned over the 52 weeks before the holiday date.
Do casual workers get holiday pay in the UK?
The short answer is yes, casual workers are entitled to holiday pay just like any other employee. However, the amount of holiday pay they receive may differ depending on their contract and the hours they work.
How is holiday pay calculated for casual workers in the UK?
The UK’s holiday pay rules and regulations for casual workers require employers to calculate holiday pay based on a 52-week average of the worker’s compensation. Casual workers are entitled to 5.6 weeks of paid holiday per year, pro-rated based on their hours worked. Employers must keep accurate records and provide the correct amount of holiday pay.
You can find a more detailed article covering multiple casual workers’ holiday pay scenarios here.
Step 1: Finding the average weekly income
Gather your employee’s pay data for the last 52 weeks of income. Then, take this total amount of income and divide it by 52. This will give you the average weekly pay for the last 52 weeks.
Equation: Total Income/ 52 = Average weekly Income for the last 52 weeks of work
From here, you would use this average weekly income as the amount you would pay your employee for taking a 1-week holiday from work. As discussed above, many holidays won’t last one exact week, so there are a few more steps to determine how much you need to pay per day of leave.
Step 2: Finding the average number of hours worked per week
Now, you will want to find the average weekly working hours to determine how many hours, on average, the employee worked per week on variable hours or zero hours.
Equation: Total number of hours worked during the last 52 weeks/ Total number of working days during the previous 52 weeks = Average number of hours worked per week
Step 3: Finding the average number of days per week
Moreover, you need to find the average number of days worked per week for the last 52 weeks to find how many hours is a working day for your employee. This will be your reference to calculate how many hours of holiday days your employee has taken.
Equation: Number of days worked /52 = Average number of days worked per week
Step 4: Finding the average number of hours worked per day
From steps 3 and 4, you can deduce the average number of hours worked per day by your employee.
Equation: Average number of hours worked per week /Average number of days worked per week = Average number of hours per day
Step 5: Finding your employee’s average hourly rate
You will then divide the employee’s average weekly income by the average number of hours worked per week to find the average hourly pay of your employee.
Equation: Average weekly Income for the last 52 weeks of work / Average number of hours worked per week for the previous 52 weeks of work = Average hourly rate
Step 6: Finding your employee holiday pay
This step is the most intuitive as it multiplies the hourly rate by the number of hours worked daily to get an average daily pay. So, if your employee takes more than one or half a day, multiply this by their average daily income.
Equation: Average hourly rate x Average number of hours per day x number of days taken