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Hot Off The Press! Employment Appeal Tribunal: Overtime & Holiday Pay

Workers have won a ground-breaking case at the Employment Appeal Tribunal to include overtime in holiday pay. This means employers must take into account overtime when calculating holiday pay. Currently, only basic pay counts when calculating holiday pay.

As a reminder, Opera 3 Payroll and Opera II Payroll already cater for average week holiday pay and the accumulation of a holiday pay fund, by offering the holiday option (hol’able) on Payment Profiles:

Holiday Pay Averaging: Where Holiday Pay Averaging is in use, the Payment Profiles included in the calculation of an employee’s average holiday pay are those with the “hol’able” option selected. To include other payments, such as overtime, in the calculation of the average holiday pay, please ensure that the associated Payment Profile has this option selected. Holiday Pay Averaging can be enabled in the Payroll Set Options form.

Holiday Pay Fund: The “hol’able” option is also used where you have chosen to accumulate an employee’s holiday pay fund as a percentage of pay. To include other payments in the calculation of the holiday pay fund, please ensure that the associated Payment Profile has this option selected. Holiday pay funds are accumulated by use of an H type deduction.

Don’t forget, Opera 3 Payroll has HMRC PAYE Recognition and is full of automated procedures. It also fully caters for the submission of Real Time Information and auto enrolment of pensions. It will save time, reduce errors and take the confusion out of processing such things as establishing an employee’s statutory entitlements, multiple pension schemes with variable percentage and fixed amounts, or changing a National Insurance code retrospectively with immediate calculation of the employer or employee adjustment.

If you are interested in Opera Payroll and HR, or are an Opera II customer looking to upgrade, contact our one of our Opera team on 0345 456 0050 for more information.