Following the quite frankly ridiculous success of last year’s article on the same topic, we have decided to provide an element of national service once again and divulge how employees can strategically use bank holidays to maximise their annual leave.
First, though, we must address the elephant in the room.
Yes, when it came to holidays and exotic destinations, 2020 may have been a washout for many. Unfortunately, the early signs for 2021 are not too great either.
Nevertheless, with vaccines seemingly aflush, there is mild optimism that there will be an opportunity for some of us to enjoy a holiday of sorts before the year is out.
But before we begin with the really fun stuff, it’s useful for us to have a little refresher on holiday entitlement.
The statutory entitlement for an employee who works five days per week is 28 days; however, due to the pandemic, there have been some small changes regarding holiday carry over.
Because of the events that transpired last year, many employees were unable or unwilling to take all of their holiday entitlement.
To help ensure that employees did not miss out on their entitlement, the Government introduced a temporary new law that allows employees to carry up to four weeks' paid holiday (in line with the Working Time Directive) into the next two holiday years.
The law applies for any holiday that the employee does not take because of issues related to coronavirus, including:
- Missing out on holiday due to self-isolation or being too sick to take leave before the end of the year.
- If an employee continues to work and is unable to take paid holiday.
This carry forward legislation change does not apply to the full 5.6 weeks’ statutory entitlement and only applies to the first 4 weeks; nevertheless, employers are allowed to choose whether to carry forward the additional 1.6 weeks if they wish to.
How is holiday entitlement calculated?
Part-time and full-time employees will have varying holiday entitlements. But despite the different lengths, the calculation for working out the statutory minimum is straightforward and always exactly the same.
First, take the number of holiday days and divide it by the months in a year.
This will provide the number of holiday days someone is entitled to each month.
Annual leave calculation
Number of days holiday / by months in a year = Y
28 days / 12 = 2.33 holiday entitlement days per month
If an employee joins a company halfway through the year, the calculation has an additional element.
Typically, annual leave years run from January to December. Consequently, if someone begins life with a new employer at the beginning of September, they must multiply their holiday entitlement by the number of months remaining in the leave year – in this instance, there would be four.
Partial year annual leave calculation
Y * by number of remaining months (September to December) = Holiday entitlement
2.33 x 4 = 9.33 holiday entitlement days for the remainder of the year
As this number includes a fraction of a day, it needs to be rounded up to the next half day. This means that that person would be entitled to 9.5 days.
Holiday entitlement myths
Holiday entitlement is a complex subject. The truth is that it really shouldn’t be.
The important thing to remember about annual leave is that all full-time employees are entitled to the equivalent of 28 days’ annual leave a year.
Many people believe that of the 28 days of annual leave, 8 are automatically given for bank holidays. The reality is that there is no statutory entitlement to be paid for bank holidays; instead, employers have the right to decide when someone takes their annual leave.
Employees do not have a statutory right to paid leave on bank holidays and any right to time off or extra pay for working on those days is entirely dependent on the terms stipulated in an employment contract.
As a result, many employers choose to remain closed on bank holidays and allocate bank holidays within their employees’ annual leave entitlement.
UK bank holidays
In the UK, England and Wales share the same public holidays. However, there are additional holidays for those in Scotland and Northern Ireland to celebrate either their patron saints and other important national events.
There are, however, certain bank holidays that all four countries have in common. These include New Year’s Day, Good Friday, early May bank holiday, Spring bank holiday and, of course, Christmas Day and Boxing Day.
UK bank holidays in 2021.
Changes from 2020
In 2020, to commemorate the 75th anniversary since the end of WW2 in Europe, the early May bank holiday was moved to Friday the 8th of May. This year, the bank holiday reverts to the first Monday in May meaning that the 3rd of May will be a bank holiday for the whole of the UK.
Making the most of your annual leave
Scotland is the only country among the home nations that don’t have back-to-back bank holidays at Easter.
For those in England, Wales and Northern Ireland, there is the option of sandwiching annual leave entitlement either side of the bank holidays in order to receive an extended break.
For example, booking Thursday the 1st of April off will mean that someone can be off for five consecutive days (including weekends) at the cost of just one holiday day.
Christmas holidays provide a further opportunity for some strategic holiday planning.
This year, Christmas Day and Boxing Day fall on a Saturday and Sunday respectively, meaning that the two bank holidays jump to the following Monday and Tuesday. And, with New Year’s Day also falling on a weekend, Monday the 3rd of January 2022 is also a bank holiday.
For those fortunate enough to live in Scotland, the bank holiday normally scheduled for the 2nd of January also falls on a weekend. This means that Tuesday the 4th of January 2022 becomes a bank holiday too.
Booking time off between Wednesday the 29th and Friday the 31st of December will mean that someone can be away from work for a period of 10 (11 in Scotland ) days (including weekends) while using up just three annual leave days.
What about PayFit?
At PayFit, we aim to simplify the lives of both employers and employees.
This is why our app provides both admins and employees with their own admin spaces.
Employees can make their annual leave requests in their space, while also observing the entire holiday calendar for people in their team.
Admins need only approve or refuse employee holiday once a request is made. The leave balance is then automatically updated on the employee space and an employee’s payslip.
Want to find out more about the ways PayFit can help improve your payroll and HR processes? Then why not book a demo with one of our product specialists today?