Holiday Pay: Factoring In Commission, Overtime, Allowances And Bonuses
James Rowland
Co-Founder & Director @ Neathouse Partners (HR, Employment Law & Health and Safety)
When an employee works a set amount of hours and receives a fixed salary, working out their holiday entitlement is a relatively straightforward task. However, calculations become a little more difficult when staff work overtime or receive commission or bonuses regularly.
The general rule is that employees should receive the same pay whilst on annual leave that they would receive if they were at work. Employees should not be discouraged from taking annual leave because they will not receive the same remuneration.
Case law how shown that commission and bonuses may need to be taken into account when working out holiday pay. However, this only applies to the first four weeks of annual leave as required by the EU Working Time Directive and not to the additionally 1.6 weeks given to employees under UK law.
Read more to find out what to do when...
- An Employee Receives Commission
- An Employee Works Overtime
- An Employee Works Voluntary Overtime
- An Employee Works Irregular Hours
- An Employee Receives Bonuses Or Additional Allowances
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