Payroll
Calculation of net holiday days
Net holiday means that holiday days are recalculated for employees with intermittent working hours. Instead of deducting one day for each weekday (gross holiday), days are only deducted on the days the employee would actually have worked.
How net holiday days are calculated at the holiday year-end closing
The formula is:
- ((Employment in whole calendar days - Non-holiday accruing leave in whole calendar days) / Days of the year) * Holiday entitlement = Paid holiday
- Paid holiday days gross / Holiday factor = Paid holiday days net
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.
In the first step, paid holiday days are calculated with decimals and aren’t rounded.
Net holiday days are always rounded up to whole days.
If the work schedule changes during the holiday year
In Payroll, holiday days are recalculated automatically if an employee with intermittent working hours changes their schedule during an ongoing holiday year. The calculation also takes into account how many holiday days have already been taken.
Example when an employee changes their work schedule
Marianne received 20 paid holiday days at the holiday year-end closing in April. At that time, she worked 4 days a week and has a holiday entitlement of 25 days. During the qualifying year, she had no non-holiday accruing leave.
Marianne has a holiday factor of 5 / 4 = 1.25.
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.
25 gross holiday days / 1.25 = 20 net holiday days
In April, Marianne took 5 holiday days.
When 5 net days are taken, 5 × 1.25 = 6.25 gross days are used.
25 − 6.25 = 18.75 gross days remaining
18.75 / 1.25 = 15 net days remaining
From 1 July, Marianne changes her work schedule and starts working 3 days a week.
The holiday factor then becomes 5 / 3 = 1.67
18.75 / 1.67 = 11.28 (that is, 12 net days remaining)
In July, Marianne then takes 2 more holiday days.
2 × 1.67 = 3.34 gross days
25 − 6.25 − 3.34 = 15.41 gross days
15.41 / 1.67 = 9.82 (that is, 10 net days remaining)
In the employee list, the following is now shown:
- 25 gross days
- 17 net days (10 + 7)
- 7 days taken (actual days taken)
- 10 remaining days
Saved holidays
Saved holiday days are recalculated one holiday year at a time. The calculation works in the same way as for paid holiday days.
Related topics
When is the best time to switch from gross holiday to net holiday?
Why does the holiday pay liability increase when you switch from gross holiday to net holiday?
Adjust values for net holiday for employees with intermittent working hours
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