Additional Holiday Pay queries

Answered

Violeta Santamaria

• June 11, 2025 10:22

Hi Team, 

Customer has some questions about the additional/average holiday pay settings in Fourth.

 

1. What happens when someone leaves and they have overtaken their holiday, is their base rate of holiday used to calculate the deduction (i.e. a day’s salary) or does the system calculate what was actually paid for the days overtaken (i.e. including the additional top-up)? And if not, what is the way around this if people are taking more holiday than they have accrued, or is it just recommended for everyone to only be able to take what they have accrued? Also for final holiday payments, is that paid at their base rate or would they get a top up payment at their average rate when leaving?
2. How does it work with regard to hour changes. For example if someone was on a 40hr contract and routinely had a few extra hours overtime each month, but then switched to a 48hr contract and didn’t. I assume they would still be paid slightly extra for their holiday even though they were now getting a higher base rate for their holiday pay (more than the hours they used to work when they were paid overtime)?
3. With regard to ‘backdated overtime’, I assume the system cannot recognise that the paytype should have been used in earlier AHP calculations so where we add this, is it correct for it to just be included in the calculations going forward – I assume we’d have to manually re-calculate their AHP if they took holiday after the overtime and there is no way around this? E.g. Employee takes holiday in month 2, in month 3 ‘backdated overtime’ is added relating to month 1 and so should have been involved in the calculation of month 2 holiday

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  Louise Wilson

  • July 01, 2025 15:55

  Hi There, 

  1. Upon terminating an employee the Final Holiday Pay (positive or negative value) will feed through to payroll automatically (if global setting switched on to do so) and will calculate according to their holiday base rate. It will not include any additional holiday pay. Additional holiday Pay is processed using different functionality. See Release Note: Additional Holiday Pay and WFM UK: HR Release Note: Back Pay for Additional Holiday Pay – Fourth & HotSchedules Customer Success Portal for details. 

  2. If your employees are set up as flexible workers, then yes the daily rate for holiday pay would take into account pay rate changes as it calculates on the rota value of the past 52 weeks. See Release Notes WFM: 52 Week Flexible Holiday Calculation – Fourth & HotSchedules Customer Success Portal

  3. Assuming 'Backdated overtime' is processed as a manual payment in payroll, you could set up a unique payment type that this flagged to calculate Additional Holiday Pay. Please refer to links in section 1. 

  Many thanks

  Louise

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