Five tips to make managing employee holidays easier

Whether you have one employee or several, managing employee holidays can prove to be an admin hassle. Here are a few tips that might help ease the admin burden.

1. Set a holiday calendar year: It might sound obvious but having a set holiday calendar year means that you and your employees know when all the holiday entitlement has to be taken by. When it comes to choosing when the holiday calendar year should start, there is no right or wrong answer. Each choice has its own pros and cons. For example, choosing a holiday calendar year that coincides with your financial reporting year means that it is easier to manage the reporting requirements under FRS 102 while choosing a holiday calendar year that coincides with the tax year means that it is easier to manage within payroll software. Other common choices for holiday calendar year include the calendar year (January to December), and using the employee’s start date.
2. Work out what the holiday entitlement will be: An employee’s paid holiday entitlement starts from the first day of their employment. An employer can provide holiday entitlement which is more than the statutory minimum entitlement (28 days). For salaried employees working 5 days a week with no overtime, bonuses or commission, it is fairly easy to work out the entitlement. Things can get a bit complicated where there is overtime involved or there are bonuses/commission that are affected by holiday. If you are unsure about if and how these elements should be taken into account in your holiday entitlement calculation, please seek advice. We regularly help employers in this area.
   
3. Make sure that employment contracts include holiday entitlement details and keep these details up to date: One of the questions that we get asked frequently by employers when an employee leaves is “how much holiday is the employee owed”. In order to work this out, we have to ask the employer to confirm when the holiday calendar year starts and what the contract says about holiday entitlement. If a contract does have a holiday entitlement clause, make sure that it is appropriate for the employment arrangement. For example, if the employee is hourly paid and the hours are variable, does the holiday entitlement clause specify how holiday will be accrued? These are the types of issues that we routinely help employers with.
4. Have a system for keeping track of holidays taken: When it comes to having a system for managing holidays, you want a system that makes the admin hassle free. We come across employers that use Excel spreadsheets, Outlook calendars, and online HR systems to manage their employee holidays. There are a number of advantages that online HR systems like breatheHR have compared to Excel spreadsheets or Outlook calendars. These include: centralised holiday information which can be accessed from anywhere by managers and employees, no messing about with Excel formulas (especially as your team grows), and built in calculators to help work out things like pro rata entitlement.
5. Ask your payroll provider if they have the capacity to assist: There are many advantages for an employer in having their holidays managed by their payroll provider. Payroll has access to information that is relevant for calculating holiday entitlement, including hours worked, average pay, overtime, and bonuses/commission. At Questfp, we provide a number of solutions for managing holidays for those employers that need assistance. We can provide Excel spreadsheet templates (for the Excel lovers), we can track and accrue holiday entitlement within the payroll software and provide holiday reports as and when required, or we can provide access to an online HR system (breatheHR) that employees can also access to view their entitlement and book holidays.

If you are interested in finding out how we can help you manage your employee holidays, please do not hesitate to contact us on 01483 338 070 or email info@questfp.co.uk.