Holiday pay on final payslip after resigning is incorrect

katies_mum

Hi, really sorry its a long one ...  was wondering if anyone could please help with a little advice?  My daughter resigned from her job of 8 years on the 6th March.  Up to this date she had 18 days holiday owing to her (carried over from Covid and past years).  Her employer was aware of this and the days are not in dispute.

Upon receiving her final salary she expected to be paid 18 days x her daily rate, as I am aware holiday pay is meant to be paid at the same rate of pay whether you are in work or on holiday.
Unfortunately, the holiday pay element was considerably less than she expected.

Salary £23500 she worked full time, 37.5 hours a week.  We had calculated the holiday pay to be 
£23500 divided by 52 weeks divided by number of hours worked 37.5 = £12.05 hourly rate

£12.05 X 7.5 hours a day  =  £90.38 daily             £90.38 x 18 days owing  =  £1626.84

We also did the calculation weekly to double check the amount:
£23,500 divided by 52  =  £451.92 a week
£451.92 x 3 weeks (15 days)   plus £271.15 (3 days  451.92 divided by 5)  =  £1626.91

As you can see both calculations are within 5p of each other

Her payslip showed - Holiday Pay  92.56 units  rate 12.520  =  £1158.90

She queried this, saying she felt it was incorrect and was given this reply:
March payslip and the calculations are correct. They way payroll calculate the holiday is as follows:

Gross salary / 365 x no of days holiday x hourly pay rate:

£23,500 / 365 = £64.38 x 18 = £1,158.90.

This then makes her daily pay £64.38 and hourly pay £8.58 which is a joke.

Please could anyone tell me if we have done our calculations correctly as her employer have said its sorted and they are going to issue her P45.

Thank you so much, sorry its so long winded x

sammyjammy

I don't know if the way they have calculated it is acceptable or if there is a defined calculation in law but they cannot pay her an hourly rate for her holiday days which is less than minimum wage.

ETA looks there is a defined way, try this Calculate holiday entitlement - GOV.UK (www.gov.uk)

Smithcom

The employer's calculation is incorrect, unless your daughter is contracted to work 365 days a year

chrisbur

They are using calendar days to calculate the daily rate but working days to calculate the holiday days due.
If you are going to use calendar days for the daily rate then you should use the same basis for the holiday ie. 7 days for each week.
So 18 days becomes 25.2 days so 25.2 times 64.38 is £1622.38
Not quite the same but a lot closer.

katies_mum

Thank you all so much, I have got to the stage where I think I am loosing my mind!
She is going to email them to give them another chance to sort this out, firstly by asking why they are using 365 days when she does not work 365 days, she is also querying why they have her daily rate as £64.38 which is far less than minimum wage and also clarification as to what the 92.56 units relate to.

If we get as much info off them regarding these, then if they still do not realise they are incorrect will go in with our calculations etc 

Appreciate you taking the time to reply x

KP20

If you don't get anywhere submit a claim with the tribunal. It's relatively easy and won't cost anything. It will very likely be settled through ACAS conciliation.

https://www.gov.uk/employment-tribunals/make-a-claim

katies_mum

Thank you, will read up on that just in case its needed.

penners324

If they're adamant they're correct then she should put in a request for unpaid wages as being paid below minimum wage for x years....

The calculation is usually salary ÷ 260 (working days in year) x number of days.

HampshireH

As above.

Has she checked her previous holiday payments and are they the same? She could find they have under paid her holiday for the duration of her employement

Or you may find evidence to present to them showing they do know how to correctly calculate it to present to them to squash any argument they may have

katies_mum

Thank you for replying.

Her pay when she takes holidays is just a normal months salary.  There are only 5 days I need to try and find out about but need her to access payslips later.   She was paid 5 days in a lump sum from the accumulation of days during Covid, I`m assuming it must have been correct, but will definitely seek out the payslip to double check, but its hard to remember when this was.

I have done every calculation you wonderful people have given us, together with the one I originally did and the one from ACAS and they all come out the same within 5p.  So am fully confident the employer is in the wrong.

She emailed her employer at 1.30 yesterday requesting clarification and information, in the hope that when they provide it they may realise they have made a mistake but as of yet they have not bothered to reply, not sure how long she needs to wait before chasing.  He official payday is tomorrow the 15th, but its also end of tax year soon so I would assume it needs sorting quickly.  When giving her `their` calculation yesterday they also said they will issue her P45!  surely they can`t do this if her wages are being queried?

Thank you all, your help and advice is amazing x

katies_mum

Its been nearly 24 hours since she contacted the finance department do you think it is too early to chase a reply?  thank you.