Average Holiday Pay improvements

Matt Jennings Updated by Matt Jennings

We are pleased to announce that as of desktop release v.2.63 we have added extra options to the average holiday pay functionality to allow for more flexibility in the calculation of the average holiday pay rate. The options that we have added are:

  • ability to choose which fields are included
  • support for Northern Ireland legislation (12 weekly average)
  • option to exclude weeks that are below a nominal pay value
  • include standard hours in worked hours
  • Include hours in average pay for holiday pay calculation
Below you will find more information on each new option

Field selection for holiday pay

We have added the ability for you to be able to select which fields should be used in the holiday pay calculation. You can select which fields are to be used for the calculation of pay, and which fields should be used in order to select hours.

If you choose to use this functionality, the selections will replace those that are automatically selected using the previous functionality.

If you choose not to select any fields, then the pre-existing functionality will continue to be used to select the fields

To utilise the functionality, navigate to System>Maintain pay groups then select the pay group and click Modify then the Holiday pay tab. The new options are highlighted below.

To add fields for either, simply click the relevant button and select the desired fields from the table on the first empty row.

You can select a row and click Delete to remove an unwanted field. (The Add button is provided for consistency but the order of the fields does not matter, so there is usually no need to insert a row.)

Once you are happy with your selection click OK.

Time period for holiday pay calculation

Support has been added for Northern Ireland legislation whereby the period for which the holiday pay average is calculated over 12 weeks rather than 52. To utilise the functionality, navigate to System>Maintain pay groups then select the pay group and click Modify then the Holiday pay tab. The new options are highlighted below.

The default selection for this is Fifty two weeks, but to change simply change the selection to Twelve weeks using the radio button.

When the Holiday pay breakdown report is run, you will now see that the report is looking back to find a minimum of 12 weeks. This may result is slightly more (as per screenshot below) when processing payrolls other than weekly, due to system constraints in converting months to weeks.

Exclude weeks that are below a notional pay value

We have added a new system field called Notional pay to the system.

This field by default does not appear on a display view, and so will need adding should you wish to use it.

If populated on an employee record, if the value of the fields to be used in the calculation of the average holiday pay are below the notional pay value set against an employee, then this payroll will be ignored in the calculation of the holiday pay value.

The value to be set is for the full payroll, so for monthly, fortnightly and four weekly payrolls it should be the value for the full payroll.

Include standard hours in worked hours

A new option has been added in the Payroll group settings to enable the addition of standard hours into the average holiday pay calculation.

Navigate to System>Maintain pay groups, then select the pay group and click Modify and navigate to the Miscellaneous tab.

When selected, the system will add the hours set against an employee to the worked hours as part of the payroll calculation including the average holiday pay calculation.

If these aren't set then it will use what is set against the pay group on the Pro-rata calculation.

Include hours in average pay for holiday pay calculation

Previously, whether the hours were included in the average holiday pay calculation was solely down to whether the addition type linked to the result field in the rate of pay relationship was included. We have now added a new option to allow for more control over what is included in the average holiday pay calculation.

To change whether the hours are included for a rate of pay relationship navigate to System>Maintain elements of pay> Maintain employee fields then select the relevant rate of pay relationship and click modify.

To ensure the hours are included in the average holiday pay calculation, check the Include in average pay for holiday pay calculation, and uncheck it if you wish to exclude the hours.

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