Holiday pay calculation changes

Holiday pay calculation changes

From April 2020, the holiday pay calculation will be changed from a 12-week average to a yearly 52-week average. As a result, this will update custom calculations that use the existing HOLPAY calculation functions. 

Note: Custom calculations using the CALCAVEPAY function will not automatically change and must be changed manually. For example, “CALCAVEPAY[12, ‘Q’]” should be changed to “CALCAVEPAY[52, ‘Q’].

A new feature has been added as an alternative to custom calculations to provide a holiday pay calculation. 

You can use the following new Employee fields that have been added to provide some data on the new values:

Holiday pay type (D = Days, H = Hours – H is the default)
Total holiday pay (This includes overtime, bonus and commission)
Total basic pay (This excludes overtime, bonus and commission)
Total holiday days (This will add up the field Period days worked)
Total holiday hrs (This will add up the Period hours worked field, and any hours from Rates marked as Worked and Hourly)
Holiday pay rate (this is calculated using the above fields)
Standard days worked (this field is manually set, and is for the standard value of days worked in the period)
Period days worked (This is the period value for days worked within the period, and is either set using the above field or manually if the Standard days worked field is zero)

For this to work, starting in the 2020 tax year, the Include in average pay for holiday pay checkbox should be ticked for any Additions that the Holiday is calculated from (e.g. their Salary):

The Holiday pay rate can be used to set up a new Addition relationship with a rate of pay element. The holiday pay addition can be set up with a Holiday pay addition type:

A new calculation has been added to the Payroll calculation to calculate Holiday pay. This will take effect from the start of the 2020 tax year. It will look back through the archive and add up Pay and Hours, taking into account any changes in the Pay group.

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