Calculating holiday entitlement
Holiday entitlement can be difficult to calculate. There are so many variables to take into account; is the nanny working full-time or part-time? Is she in a temporary position? Is the family giving the nanny all bank holidays as paid days off, or only the statutory entitlement? And last, but not least: what does the term pro rata actually mean?
Holiday can only be taken as it has been accrued, so if nanny takes more time off than she is entitled to for the duration of her employment, the employer has the right to withhold a portion of her final salary as compensation. Nannytax will help with this calculation.
All employees in the UK are entitled by law to 5.6 weeks holiday per annum. For a full-time employee that is 28 paid days off per year, of which 4 weeks is standard leave and 1.6 (or 160% of the working week) is 8 of the bank holidays. The entitlement to 8 bank holidays as paid days off is a relatively new law, which was introduced in April 2009. Previously it was only those actually worked in a bank who were legally entitled to the bank holidays as paid days off.
Many families had been giving their nannies all bank holidays as paid days off well before the introduction of the new law, and if this is the case the nanny's statutory entitlement will remain at 5.6 weeks, including the 8 bank holidays as arranged with the family. Not 5.6 weeks plus 8 bank holidays.
Part-time and temp nannies
What about if the nanny is only working part-time? The calculation is simple. Multiply the number of days the nanny works by 5.6.
If the nanny is employed on a temporary basis she is also entitled to holiday. The calculation of the holiday entitlement for a temp nanny in a full-time position is straight forward: divide 28 (the total number of days she would be entitled to if she was working the whole year) with 52 (the total number of weeks in a year). Then you simply multiply the answer with the number of weeks the nanny has been contracted to work for.
Example 1: Nanny A has been hired to work for family B 5 days per week for 16 weeks:
28 / 52 = 0.54 * 16 =8.6
The holiday entitlement for nanny A is 8.6 days.
If the nanny is employed on a part-time basis in a temporary position the calculation is a little bit more complex. First you need to establish the annual entitlement if she was working the whole year. As before, you simply multiply the number of days she works per week by 5.6. Then you follow the steps as outlined in the calculation above.
Example 2: Nanny C has been employed to work for family D for three days per week for 6 weeks:
5.6 * 3 = 16.8 / 52 = 0.276 * 6 = 1.9
Holiday entitlement for nanny C is 1.9 days.
Pro rata is a word that pops up frequently whenever you're dealing with a part-time nanny. Just like the salary will be calculated on a pro rata basis so will the holiday entitlement. Pro rata is Latin for "proportionally" or "a proportion of" and it simply means that the part-timer's entitlement is calculated according to what proportion of a full-time job their hours make up.