A holiday fund is a monetary fund accrued to cover the cost of an employee's holidays. When your employee takes holiday leave you can use the accrued money from the holiday fund to pay their wages. 

 NOTE: This is different to a holiday scheme, which accrues days available to be taken as holiday. 

Holiday funds can be contributed to by your employee as a savings scheme, or by you as an employer. This enables you to budget for employee wages during holiday periods.

When the employee makes contributions to the fund, these can be deducted before or after tax and national insurance and can be subject to pension contributions.

To take the full annual accrual part-way through the year, you can pay more holiday fund than is currently accrued, leaving a negative holiday fund.

For more information on processing holiday funds in Sage 50 Payroll, check out our guides:

• Set up a holiday fund >
• Edit an existing holiday fund >
• Set payments to accrue a holiday fund >
• Assign a holiday fund to an employee >
• Check the accrued holiday fund amount >
• Pay an amount from a holiday fund to an employee >
• Change an employee's holiday scheme when there's an existing holiday fund assigned >

[BCB:133:Limitless - 50 Payroll - Holidays and Absence:ECB]