Managing your workforce: Holiday Pay calculations

Are you managing a team on farm? Are you making the right calculations for Holiday Pay? It’s been suggested in a recent article on Fwi.co.uk that some farm owners/employers may not be, and as a result may be liable for making backdated payments to their staff. Here at Farmplan we work with farmers and farm employers on a daily basis and wanted to bring you some information on this subject in this Managing your workforce insight blog.

What you need to know

Under the Working Time Regulations 1998 full-time workers are entitled to a minimum of 5.6 weeks paid annual leave each holiday year, which equates to 28 days for those who work five days a week. 

This includes an allowance for the eight days of public holiday (in most of the UK), but an employer does not have to give a worker paid leave on the Bank Holiday itself unless specified in their contract.

Both overtime and commission should be included in Holiday Pay calculations, rather than simply base salary, meaning that due to the seasonal nature of farming work, calculations are even more tricky to do. Calculations need to take into account the last 52 weeks of earnings.

What do you need to do?

Check your calculations now. Employees have the right to request a review and backdate their holiday pay for 2 years if they believe they have been underpaid their entitlement. It is worth checking this now, ensuring you’re using the right tools to enable you to do this effectively and quickly. If you notice there have been errors, take the time to correct them.

Farmplan software Earnie – Holiday Pay module

If you’re managing your employee records in-house or with a bookkeeper, perhaps now’s the time to review your processes and ensure you are on top of this.

Farmplan Earnie customers can add the Holiday Pay module to their existing setup. The module will simply calculate the required holiday payments in line with legislation going forward, meaning there will be no requirement to do any manual calculations as the system will automatically calculate Holiday Pay based on 52 weeks of earnings including any commission or overtime.  Users can rest assured they’re in control and compliant with regulations, giving them and their employees confidence the holiday payments are correct.

Speak to Farmplan today. If you’re new to Farmplan payroll software or just want to discuss adding the Holiday Pay module, get in touch.

Useful links and further reading:

https://www.fwi.co.uk/business/business-management/staff/holiday-entitlement-guide-to-the-law-for-farm-employers

https://www.gov.uk/holiday-entitlement-rights

https://www.acas.org.uk/checking-holiday-entitlement/calculating-holiday-pay

https://www.activpayroll.com/news-articles/uk-holiday-pay-changes-in-2020

Your business is our business

Contact our experienced team to identify the right solutions for your farming business big or small