Calculating holiday average pay

JustAnotherSaver

My holiday pay is calculated on a 3 month average. I have been able to work this out over time to be pretty much spot on. Some times what they pay me is pence out & i'm not for going to payroll over 10 pence per day.

Let's say for examples sake i calculate my average daily earnings on a given week to be £90.05.
Often i will be paid £90.05. Some times i will get on my payslip it saying £89.95 or £90.03 or whatever. Over such small amounts i don't bother asking for it.


I get to this by:
* adding up the previous 12 weeks gross payments
* divide this figure by 12 to get the weekly average
* divide this figure by 5 to get the daily average

And like i say, it pretty much matches what i get paid.

Although our system has changed recently & we've gone on monthly payment with pension contributions.

Took me a tad longer to work out but i've done it & this time i am £pounds out on holiday pay per day, not pence.


I just wanted to check that the method i use to calculate the pay is correct & that there's no flaw in it somewhere with extra decimal places maybe or just a poor method altogether.

specialboy

Ask your payroll how they work it out.

JustAnotherSaver

They're not in now until next week so I thought i'd try look in to it in the meantime.

In my mind there's only 1 possible way to work it out but if anyone knows where I may be going wrong then feel free to point me in the right direction.

Like i said, i've done this for years & it's always been bob on or pence out. Not pounds like this time.

General_Grant

JustAnotherSaver wrote: »

My holiday pay is calculated on a 3 month average. I have been able to work this out over time to be pretty much spot on. Some times what they pay me is pence out & i'm not for going to payroll over 10 pence per day.

Let's say for examples sake i calculate my average daily earnings on a given week to be £90.05.
Often i will be paid £90.05. Some times i will get on my payslip it saying £89.95 or £90.03 or whatever. Over such small amounts i don't bother asking for it.


I get to this by:
* adding up the previous 12 weeks gross payments
* divide this figure by 12 to get the weekly average
* divide this figure by 5 to get the daily average

And like i say, it pretty much matches what i get paid.

Although our system has changed recently & we've gone on monthly payment with pension contributions.

Took me a tad longer to work out but i've done it & this time i am £pounds out on holiday pay per day, not pence.


I just wanted to check that the method i use to calculate the pay is correct & that there's no flaw in it somewhere with extra decimal places maybe or just a poor method altogether.

Has your actual annual gross pay changed? Are you paid an annual salary or is it an hourly rate or different rates?

If you are simply having deductions taken from your pay for pension contributions then that does not affect your gross pay. However you should also have pension contributions deducted from your holiday pay, shouldn't you?

I wonder whether they are using the last 3 months' pay as equal to 12 weeks. Does playing with the figures on that basis get you anywhere nearer the figure?

sangie595

Some employers calculate a month as including weekends, and others as only five days a week. This would change the calculation. I am not big on the calculations side of things (our sector rarely get them wrong) but the employer changed the way a month was calculated some years ago to make striking "bite" more!


Out of interest - why are you being paid for holiday. It is legal in some circumstances, but in most employments it isn't - you should get holidays.

specialboy

sangie595 wrote: »

Some employers calculate a month as including weekends, and others as only five days a week. This would change the calculation. I am not big on the calculations side of things (our sector rarely get them wrong) but the employer changed the way a month was calculated some years ago to make striking "bite" more!


Out of interest - why are you being paid for holiday. It is legal in some circumstances, but in most employments it isn't - you should get holidays.

I think the op means that if they take a weeks holiday the pay they receive is an average of the previous 3 months earnings

General_Grant

sangie595 wrote: »

Out of interest - why are you being paid for holiday. It is legal in some circumstances, but in most employments it isn't - you should get holidays.

The legal entitlement is to paid holiday rather than just holiday.

JustAnotherSaver

Oh dear.

Yes ... paid holiday. Apologies for my incorrect wording being misleading. I should have said paid holiday instead of holiday pay.

Just to straighten a few things out in case it helps you helping me as it seems i've caused confusion elsewhere too....

Paid holiday is calculated based on the previous 12 weeks average earnings.
Gross earnings.

That is including all or any overtime.
It is before deductions.

So if i earn (gross) (with overtime) £500 for 12 straight weeks (in reality wont happen, but let's do it for this example) but for 12 straight weeks i have £100 coming out of my wage for whatever reason - purchases, loans, pension, fines, whatever, then my average earnings would be £500 for the week, not £400. So if i took 5 days holiday (a week off) i would expect to get paid holiday of £500 & any deductions to be taken from that (tax, NI etc). Since we take days off (paid holiday) the figure displayed on our payslip is a daily rate.

I was paid weekly (which is where the 12 weeks stems from) but now i am paid monthly.
I am also paid by the hour. No salary.


Hope this helps.

LittleVoice

JustAnotherSaver wrote: »

Oh dear.

Yes ... paid holiday. Apologies for my incorrect wording being misleading. I should have said paid holiday instead of holiday pay.

Just to straighten a few things out in case it helps you helping me as it seems i've caused confusion elsewhere too....

Paid holiday is calculated based on the previous 12 weeks average earnings.
Gross earnings.

That is including all or any overtime.
It is before deductions.

So if i earn (gross) (with overtime) £500 for 12 straight weeks (in reality wont happen, but let's do it for this example) but for 12 straight weeks i have £100 coming out of my wage for whatever reason - purchases, loans, pension, fines, whatever, then my average earnings would be £500 for the week, not £400. So if i took 5 days holiday (a week off) i would expect to get paid holiday of £500 & any deductions to be taken from that (tax, NI etc). Since we take days off (paid holiday) the figure displayed on our payslip is a daily rate.

I was paid weekly (which is where the 12 weeks stems from) but now i am paid monthly.
I am also paid by the hour. No salary.


Hope this helps.

In that case, as you work irregular hours, they can work out your earnings over the previous 12 weeks (the correct time period) to get your average pay for a day.


Remember that they can exclude "voluntary" overtime from the calculation but should now include "non-guaranteed" overtime. "Non-guaranteed" overtime is where if they do offer the overtime you are obliged to work it. (If you are not obliged to work overtime when offered, then it is "voluntary".)


Next week do let us know how they explain what they have done to calculate your holiday pay.

JustAnotherSaver

Yeah what they do is they calculate over the 12 previous weeks.

And overtime isn't voluntary. I know you guys will tell me it is, but it really isn't. We've been down that road before. You either do it or you're out the door as one guy found many years ago when he no longer wanted to do it.

If you just do your 'basic hours' then you're already pushing 50 hours by the end of the week. A Saturday on top (we have to work most of them) will have you doing 56 hours. That's without working 'outside' of the hours.

I'm also aware we can opt out of this & cap ourselves at 48 hours.
But then 1) we'd get terrible pay at the end of the week & 2) they would just started us late & finish us late & make us do every single Saturday.

I know i'm going off on a tangent a little there, but it needs explaining before anyone says you don't need to do it. It's correct, i don't - the other option is to quit

dharm999

Sorry, but a slight hijacking of this thread. If the previous 12 weeks covers the period when minimum wage increased, should any holiday taken after 1st October be paid at the new minimum wage rate, or an average of the previous 12 weeks?