Set up an enhanced holiday pay scheme
Enhanced holiday pay schemes hold two separate entitlement balances. One for days paid at an enhanced rate and one for standard days. This lets employers cap how many days are paid at the higher rate, with the remainder paid at the standard rate.
Before setting up enhanced holiday pay schemes
An average holiday pay If an Employee's work has no fixed or regular hours, their holiday pay will be based on the average pay they received over the previous 52 weeks (or a average based on the available number of weeks if less than the full 52. scheme with Calculation in Hours / Days set to Days must have been set up before an enhanced scheme can be set up. The system returns an error if one is not available.
Set up enhanced holiday pay schemes
Enhanced holiday pay schemes are set up using the AVG / ENH Days option in Holiday Type when adding leave.
To set up an enhanced holiday pay scheme:
- Go to Edit Details, then select Leave.
- Select AVG / ENH Days in Holiday Type.
- Enter the number of days that are paid at enhanced pay rate in Enhanced Days Allowance (# days/year).
- Enter the number of days that are paid at the average or other standard pay rate in Average Days Allowance (# days/year).
- If this scheme is not going to include enhanced pay rates only average, clear selection of Enhanced Scheme.
- To avoid the employee receiving basic pay The standard amount paid to an employee which excludes additional payments like bonuses, overtime, and allowances. and the enhanced rate for the same day, select Offset Basic Pay.
- Add an Average Holiday Pay Scheme.
- To save, select Update Employer.
Pay codes used with enhanced holiday pay
Two system-managed pay codes are used when enhanced holiday pay is processed. Both display on payslips, journals, and nominal exports.
Both pay codes are taxable, subject to National Insurance A system of contributions paid by workers and employers in the UK, which funds various state benefits, such as the State Pension and Jobseeker's Allowance., pensionable, qualifying earnings To assess the employee we use the Earnings Trigger for automatic enrolment – This is based on the qualifying earnings elements. This is made up of pay elements like Salary, Hourly Pay, Overtime, Commission, Bonus, Statutory Payments etc. Once the employee has been assessed then that trigger is no longer used. for auto-enrolment It’s a legal requirement for employers to automatically enrol workers into a workplace pension scheme if they meet the qualifying criteria and allow employees to opt in or join if they are aged between 16 and state pension age., and subject to attachment of earnings. They are system managed and cannot be manually edited or deleted.
A nominal mapping field is available in System for each pay code. Finance customers must set the correct ledger code so daily holiday pay posts correctly to the accounts.
| Enhanced holiday pay codes | |
|---|---|
| Pay code | Description |
| AVGHOLDAYS — Average Holiday If an Employee's work has no fixed or regular hours, their holiday pay will be based on the average pay they received over the previous 52 weeks (or a average based on the available number of weeks if less than the full 52. Pay Days | Used when average holiday pay based on days is applied (enhanced rate). |
| HOLDAYRATE — Holiday Days (Day Rate) | Used to pay days at a flat daily rate (the standard or other rate). |