Payment in lieu of annual leave

Ollyrowe

Hi there. I have a question, I've done some research but I've been unable to find an exact answer.

I'm leaving my job at the beginning of august, which will be 80% of the way through our financial year and I have approximately 20 days of holiday left. I do not want to use these holidays, I'd like to be paid for them, which is allowed in my contract and my manager has agreed to it. My contract states that I will be paid for any remaining leave, which will be pro-rated to the day I leave.

I do not know financially the best way to do this, my options are to be paid for the remaining holidays within my final salary, so I'll effectively be paid for two months at once, or the second option is to book August as holiday, so effectively leave my job at the start of September and be paid normally for August.

Many thanks for any help

McKneff

Financially, it makes no difference. Any tax you overpay will sort itself out over a month or so.

ceh209

McKneff wrote: »

Financially, it makes no difference. Any tax you overpay will sort itself out over a month or so.

Tax no, but it might for NI, depending on what you earn. I used to get my overtime paid quarterly rather than monthly because I'd then be over the Upper Earnings Limit for those months so paying NI at 2% not 12%

OP try some salary calculators to put in what you've earned to date and look at the different scenarios. Alternatively this might help to understand the NI point: https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

badmemory

If you are starting another job immediately then to avoid the possibilty of your personal allowance for August being used twice get it all paid together. If you are not starting work immediately then check on what your NI payment will be as you will get the tax adjusted next time you earn.


One cautionary comment, I know someone who booked it as holiday & failed to take account of a line in his contract which said they could recall him from holiday, they did!

agrinnall

badmemory wrote: »

One cautionary comment, I know someone who booked it as holiday & failed to take account of a line in his contract which said they could recall him from holiday, they did!

That happened to someone I know, who had already started at his new job, and he had to go back into the old one for several days.

Ollyrowe

Thanks for all of the responses and advice. I've been in contact with my HR department and I'll go away to do some calculations.

I'm going travelling for 18 months, so I wont be going into another job. I need to finish work on the 25th of July, so I might book the last few days of July as leave.

[Deleted User]

Ollyrowe wrote: »

I'm going travelling for 18 months, so I wont be going into another job. I need to finish work on the 25th of July, so I might book the last few days of July as leave.

That kind of makes a difference to the thread and responses to date!

Google P50 claim form.