A general theory of pro-rata and part-time holiday entitlement  

HR administration is usually routine.    

Maintaining people records.  

Staying compliant.  

Reviewing and renewing company policies. 

Reviewing and renewing contracts. 

Running workforce analytics and reports. 

Referencing and background checks. 

… the list goes on. 

They all take training, hard work, skill, practicality, intellect, and knowledge of the organisation and its workforce.  

But they don’t usually require your brain to do Olympic-standard gymnastics.  

They don’t take the kind of decade-long lateral thinking that Einstein exercised to come up with his special theory of relativity—that’s the one where relatively speaking you don’t age as fast if you travel at 99% light speed, because you’re technically traveling into the future. I know, right, your mind is a pretzel right now… mine too.  
 
That’s until you stumble upon the quantum realm of pro-rata holiday entitlement.  

Dun dun duuun!  

Nothing makes sense here. Calculations that work everywhere else don’t work for pro-rata entitlement. Different organisations can produce different entitlements for people working under the exact same terms. And part-time pro-rata is… well… Einstein eat your heart out.   

And just when you think you’ve got it all sorted—when you’ve got the FTE, the part-time hours, the start dates, the leave dates, and you’ve entered them all into a handy online leave calculator—another element comes creeping into the equation to burst your brain bubble. What happens when one 25-hour-a-week employee works on Mondays, and another 25-hour-a-week employee doesn’t? Are the calculations always the same for them?  

“But… but… this online annual leave calculator doesn’t have a setting for that!” 

Well, if you’re an HR manager who has all this figured out, then here’s your Nobel Admin Prize and there’s no need to read on… unless you want to read about just how clever you are, and who wouldn’t want that?   

For anyone else, we spent a good deal of last week sitting in university armchairs and twizzling our thinking-moustaches, so that we can bring you this …. The SenseHR general theory of pro-rata and part-time holiday entitlement.  

And unlike other theories you might find in lesser scientific HR publications, we leave no stone unturned… not even that thing about bank holidays.  

First thing’s first 

What does pro-rata even mean? 

Translated from the Latin it means ‘according to a calculated rate or share’.  

So, when it comes to leave entitlement, pro-rata is a calculation that ensures anyone doing less than the full-time hours for a full leave year will still get their fair share of leave. Whether that’s a part-time worker, or a full-time worker who is starting or leaving part way through the year. 

The calculation 

The statutory leave entitlement is 5.6 weeks per year. All workers are entitled to this, whether they’re full-time, part-time, zero-hours contractors, casual workers, agency workers, or other types of non-standard worker.  

While contracts with no fixed hours need a slightly different calculation (which we’ll cover in a later post), this part-time and pro-rata calculation can be used for anyone with fixed hours, whether they’re full-time, part-time, or starting or leaving part way through the leave year. 

Formula: 

Step 1.  

First calculate the proportion of the leave year that’s been worked (or will be worked for those starting part way through the year): 

X ÷ Y = P 

Where: 

X = Total contracted working time still to be worked in the year (This will be less than Y if a worker starts and /or leaves part way through the leave year. It will be the same as Y if the worker is in your employment for the full leave year.) 

Y = Total contracted working time per full leave year for worker. 

Step 2.  

Then calculate the full-time holiday entitlement due for the proportion of the year that’s been worked: 

P x A = H 

Where: 

P = See step 1. 

A = full-time holiday entitlement (FTE) 

NB: for full-time workers starting or leaving part way through the year, there’s no need to continue to Step 3. 

Step 3.  

Then calculate the part-time holiday entitlement due for the proportion of the leave year that’s been worked: 

H x (T ÷ F) 

Where: 
H = See step 2. 

T = Contracted time per week. 

F = Full-time equivalent contracted time per week. 

Example in days:

Step 1 

X = The worker starts part way through the leave year. So, their remaining working time for the year is 130 days 

Y = The worker is contracted to work 180 days in a full leave year.  

130 ÷ 180 = 0.72  

Step 2 

P = 0.72 (result from step 1) 

A = 28 days (FTE leave entitlement) 

0.72 x 28 = 20.16 

Step 3 

H = 20.16 (result from step 2) 

T = 30 hours per week (contracted weekly hours) 

F = 37.5 hours per week (FTE) 

20.16 (30 ÷ 37.5) = 16.13 days of leave entitlement.  

This can be rounded up to the nearest half day to make 16.5 days of entitlement per year. 

Example in hours: 

Step 1 

X = The worker starts part way through the leave year. So, their remaining working time for the year is 975 hours. 

Y = The worker is contracted to work 1350 hours in a full leave year.  

975 ÷ 1350 = 0.72  

Step 2 

P = 0.72 (result from step 1) 

A = 210 hours (FTE leave entitlement) 

0.72 x 210 = 151.2 

Step 3 

H = 151.2 (result from step 2) 

T = 30 hours per week (contracted weekly hours) 

F = 37.5 hours per week (FTE) 

151.2 (30 ÷ 37.5) = 120.96 hours of leave entitlement. 

This can be rounded up to the nearest half hour to make 121 hours of entitlement per year. 

Calculating for bank holidays 

If bank holidays are a normal working day for your organisation, then you’re good to go.  

Otherwise… 

Beware the bank holiday variable! 

Most HR departments won’t be calculating entitlement using the calculation outlined and a standard calculator. Most will rely on their HR software’s integrated calculation or online leave entitlement calculators. But that can lead to serious inaccuracies and inconsistencies. Automated entitlement calculators usually have an option to either include or exclude bank holidays from the calculation. And most HR professionals will choose to include bank holidays in the leave entitlement is that’s their company policy. Which makes sense. But this can lead to part-time employees who don’t work on Mondays, which is the most common day for a bank holiday in the UK, being (very) short-changed.  

How so? 

Let’s say that Brenda and Bertie both work one day a week. Brenda works on Mondays and Bertie works on Wednesdays.  

If your organisation includes bank holidays as part of the full-time leave allowance, then the standard automated calculation would leave both Brenda and Bertie with an entitlement of 0. That’s alright for Brenda—she’ll get 7 days off according to the number of Monday bank holidays through 2023. But it’s not fair for Bertie who doesn’t benefit from the bank holidays. And now he can’t book any Wednesdays off for the whole year.  

The problem with the calculation is very clear in the case of Brenda and Bertie, and any HR manager would immediately question why Bertie had no allowance and correct the mistake. 

But let’s look at James and Julius. They’re both working 3 days a week and are contracted for 30 hours across those days. James works Monday to Wednesday and Julius works Tuesday to Thursday. The standard automated calculation for organisations that include bank holidays in their entitlement gives James and Julius 120 hours of holiday entitlement each. But because Julius isn’t contracted to work on any bank holiday days, he should be getting 168 hours of entitlement. Would Julius’s HR manager catch the problem in a large organisation? Would Julius realise he was being short-changed?  

Not only is the formula unfair but if it came to a tribunal, Bertie and Julius could claim unfair treatment according to the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Eek! 

The best way to avoid the discrepancy, is to do the pro-rata calculation as though bank holidays are a normal working day for your organisation, then subtract the bank holidays from the total figure where appropriate. Thereby giving Brenda no additional holidays to book, giving Bertie 5.6 days (or 6 if you round up), giving James 120 additional hours above the bank holidays to book, and giving Julius 168 hours.  

To do that you can use the calculation we’ve laid out or you can carry on using automated calculators—but leave any allowance for bank holidays until the end, so it can be applied to the appropriated employees, according to their working pattern.  

So, that’s it. That’s our theory of pro-rata and part-time holiday entitlement. And we call it a theory, rather than a rule, because organisations use various calculations and methods, all of which give different results.  

But we think the one that we’ve shared is the fairest. It’s the one that our SenseHR software uses by default and bank holiday calculations are applied according to individual working patterns and company policies.  

But if you don’t agree, you can simply tailor our next generation HRIS to your precise needs.