Payment for unused annual leave

naaads_xo

Hi all,

I’ve recently been made redundant and I’m looking for advice on whether my employer has calculated my unused annual leave correctly.

I’m a full-time salaried employee working Monday to Friday (37.5 hours per week). Our annual leave year runs from January to December.

For my unused annual leave (8.5 days), payroll calculated a daily rate by dividing my monthly salary (£2,842.75) by the number of days in the month (30 or 31). For December, this produced a daily rate of £91.70, which was then multiplied by 8.5 days.

Earlier this year, when calculating my contractual sick pay, the employer explicitly used working days and hours, not calendar days. They confirmed that:

• 13 weeks’ full sick pay equated to 13 × 37.5 hours = 487.5 hours
• This was treated as 65 working days (5 days per week)
• They expressly rejected interpreting a week as 7 calendar days, stating that one week of absence counts as 5 working days, not 7

My understanding is that annual leave pay for a Monday–Friday salaried employee should reflect normal working pay (i.e. working days rather than calendar days), and that spreading salary across calendar days may understate the value of a leave day.

Does this calendar-day method align with UK holiday pay rules for unused leave on termination, or should it be calculated using a working-day or weekly-pay approach? Any guidance or references would be appreciated.

saajan_12

It should be on the same basis as the 8.5 days was calculated, which is presumably working days. 

You already have the weekends off so you wouldn't use holiday for those, so their way is silly. 

Woodstok2000

Doesn't look right to me - I would question it with them. 

Gov.uk says it should be calculated using weekly pay. Taking your monthly salary x 12/52 = £656.02 per week. 8.5 days holiday is 1.7 working weeks, so you should be getting 1.7 x 656.02 = £1115.23

Savvy_Sue

It may seem illogical, but I think it is one of the 'standard' methods a payroll system may use for calculating part months. I don't recall using it for calculating holiday pay so I'd query it.