Contractor Umbrella Holiday Pay
Question: I notice on my payslip holiday pay is being deducted? Just wanted to clarify why this was? It was about £100 last month so not insignificant.
Answer: As an employee of ContractorUmbrella Ltd you are entitled to 28 days holiday each financial year and, under the Working Time Regulations, holiday pay must be shown as a separate entry on your payslip when you take annual leave rather than included within your pay rate.
Contractor Umbrella Ltd could not possibly pay holiday pay at every employee’s actual assignment rate, given the modest margin that we retain. As an example of this, an employee on an assignment earning £600 per day would be entitled to £16,800 per year in holiday pay. Our margin of £27.50 per week would cover less that 10% of this! So holiday pay is taken as a deduction from your weekly or monthly payments and paid back when you take time off.
As an employee of Contractor Umbrella Ltd you are entitled to a salary made up of two parts. You are guaranteed a national minimum wage payment for the hours/days invoiced regardless of whether we have received payment or not. Anything you earn above the national minimum wage rate is paid to you as a profit related bonus. This pay structure allows us to base your holiday deductions on the national minimum wage.
Holiday will be calculated as follows:
Weekly invoices:
28 days per year x 7 hours per day @ £6.19 per hour / 52 weeks = £23.34 holiday pay
Monthly invoices:
28 days per year x 7 hours per day @ £6.19 per hour / 12 months = £101.11 holiday pay.
By basing holiday pay on the national minimum wage, we are ensuring that we are taking as little as we possibly can, whilst still offering you a fully compliant service. For each day taken as holiday you are paid at the national minimum wage rate:
1 day holiday = 7 hours @ £6.19 = £43.33.
Please be assured that although holiday pay is deducted it remains your money. You can enter holiday days on our system for any days you are contracted to work, but didn’t. You can select ‘Full’ view in the timesheet section and this will allow you to submit holiday days to us.
Once you have submitted a holiday timesheet, your holiday pay will be included with your next invoice payment following that period. If you have not accrued enough holiday pay to refund the total number of days entered as holiday, we will pay out as many full days as possible.
Any unused holiday pay will be refunded to you either when you leave or before the end of the financial year, whichever comes first.
