HMRC recently announced changes to holiday entitlement calculations for irregular-hour workers. These changes apply for leave years that begin on or after 1 April 2024.

To find out more, visit Gov.uk >

The change re-introduces calculating holiday entitlement as, typically, 12.07% of the hours an employee works.

 NOTE: If your holiday year starts before 1 April 2024, the prior rules apply until your next holiday year begins.

Calculating accrual

You can't use Sage 50 Payroll to calculate holiday accruals based on a percentage of hours worked. You need to calculate and track this accrual outside of your payroll software.

Holiday funds in Sage 50 Payroll

The 12.07% accrual calculation is separate to Holiday funds that are used in the construction industry. Holiday funds calculate a pot of money to pay an employee while on holiday, which defaults to 12.07% of employees' pay.

The holiday fund feature doesn't calculate holiday accrual.