Payroll
Why does the holiday pay liability increase when you switch from gross holiday to net holiday?
The holiday pay liability may increase for employees with intermittent working hours when you switch from gross holiday to net holiday. This happens because of rounding in the calculation.
When holiday days are recalculated from gross days to net days, the result may include decimals. Holiday days are always rounded up. This means that earned, paid and saved holiday days (years 1–5) may increase slightly after the recalculation, which can increase the holiday pay liability.
The holiday pay per day may also change because a holiday factor is used in the calculation.
Examples
An employee works 3 days a week. The company’s standard working schedule is 5 days a week. The employee is entitled to 25 holiday days, has taken 17, and has 8 holiday days remaining (gross). The holiday pay per day is SEK 2,000 per day (gross).
When you switch to net holiday, a holiday factor is calculated for the employee. In this case, it’s 1.67 (5 / 3).
The holiday factor is calculated by dividing the company’s standard number of working days per week (full-time) by the number of working days per week in the employee’s current work schedule.
8 remaining gross holiday days / 1.67 = 4.79 net days, which are rounded up to 5.
Holiday pay per day gross SEK 2,000 × 1.67 = Holiday pay per day net SEK 3,340.
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