Holiday legalities and pro-rata calculation
Holiday legalities and pro-rata calculation
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StevieBee

Original Poster:

14,430 posts

273 months

Monday 6th October
quotequote all
Been a while since I did this and last time I did, I had someone to do it for me. Just need a quick sense check!

I'm recruiting a team of four people to work on a small project. Each will be assigned 160 hours of work at £15ph. (Hours might increase to 200). They'll be employed PAYE.

As it's a short project, our preference is that they don't take holiday during this contract period. Instead, we'll pay them their holiday entitlement at the end.

First question: Can we stipulate this or do we have to state it just as a preference?

On the basis of standard holiday entitlement being 20 days plus 8 days public holidays, I've worked out the pro-rata days are 2.25 (18 hours).

Second question: Is that right?

Thanks chaps.




MustangGT

13,517 posts

298 months

Monday 6th October
quotequote all
My first question would be why put it under PAYE if it is a specific short term contract, looks like 4 weeks?

Normal multiplier would be 12.07% as an additional amount to cover holidays.

StevieBee

Original Poster:

14,430 posts

273 months

Monday 6th October
quotequote all
MustangGT said:
My first question would be why put it under PAYE if it is a specific short term contract, looks like 4 weeks?

Normal multiplier would be 12.07% as an additional amount to cover holidays.
Thanks.

PAYE - our client is a local authority and they specify the terms. Bit of a pain but it is what it is!

Simpo Two

89,820 posts

283 months

Monday 6th October
quotequote all
StevieBee said:
PAYE - our client is a local authority and they specify the terms. Bit of a pain but it is what it is!
A local authority states that everybody working for it must be PAYE? I've heard the 'must be a limited company' line but not that one. How you pay people should be your business, not theirs.

Venisonpie

4,259 posts

100 months

Tuesday 7th October
quotequote all
Simpo Two said:
StevieBee said:
PAYE - our client is a local authority and they specify the terms. Bit of a pain but it is what it is!
A local authority states that everybody working for it must be PAYE? I've heard the 'must be a limited company' line but not that one. How you pay people should be your business, not theirs.
It wraps up a lot of social inclusion policy in one package - ensures all employees of a contract get thier entitled benefits/HMRC obligations are met and mitigates any potential exposure of wrong doing by a supplier or contractor. Might seem a bit ott for a short term project but will be a policy designed for larger more complex assignments.

StevieBee

Original Poster:

14,430 posts

273 months

Wednesday 8th October
quotequote all
Venisonpie said:
Simpo Two said:
StevieBee said:
PAYE - our client is a local authority and they specify the terms. Bit of a pain but it is what it is!
A local authority states that everybody working for it must be PAYE? I've heard the 'must be a limited company' line but not that one. How you pay people should be your business, not theirs.
It wraps up a lot of social inclusion policy in one package - ensures all employees of a contract get thier entitled benefits/HMRC obligations are met and mitigates any potential exposure of wrong doing by a supplier or contractor. Might seem a bit ott for a short term project but will be a policy designed for larger more complex assignments.
That's pretty much it. Not all councils impose the requirement and the only option for those that do is to not bid for the work in the first place.

But to be honest, it benefits us too. PAYE tends to attract a higher calibre applicant and we're not having to administer and check time sheets and what-not.

MustangGT

13,517 posts

298 months

Thursday 9th October
quotequote all
StevieBee said:
Venisonpie said:
Simpo Two said:
StevieBee said:
PAYE - our client is a local authority and they specify the terms. Bit of a pain but it is what it is!
A local authority states that everybody working for it must be PAYE? I've heard the 'must be a limited company' line but not that one. How you pay people should be your business, not theirs.
It wraps up a lot of social inclusion policy in one package - ensures all employees of a contract get thier entitled benefits/HMRC obligations are met and mitigates any potential exposure of wrong doing by a supplier or contractor. Might seem a bit ott for a short term project but will be a policy designed for larger more complex assignments.
That's pretty much it. Not all councils impose the requirement and the only option for those that do is to not bid for the work in the first place.

But to be honest, it benefits us too. PAYE tends to attract a higher calibre applicant and we're not having to administer and check time sheets and what-not.
In general I would agree, but for 160 hours work? No chance I would consider it under PAYE, too much of a faff.