Acas guidance on calculating holiday pay

05 May 2017

In advance of more in-depth guidance, Acas has made some minor changes to their holiday pay guidance web pages.

Calculating holiday pay

In addition to current legislation, a number of recent court judgments should be considered when calculating holiday pay.

This means that the rules employers and workers follow to calculate holiday pay may need to be updated.

Key points:

  • Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement but there is currently no definitive case law that suggests 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.”

See calculating holiday pay from Acas for further details on these key points.


CIPP comment

Earlier this year the CIPP held Think Tanks allowing CIPP members to meet with representatives from the Department for Business, Energy and Industrial Strategy (BEIS) and the Advisory, Conciliation and Arbitration Service (Acas) to discuss the guidance needed to help employers correctly calculate holiday pay. We expect further, more in-depth guidance to come out later this year; we will publish details through our news pages as soon as this becomes available.