In 2024, new legislation was introduced affecting how holiday entitlement and pay must be calculated for workers in the UK.

As part of this change, Paycircle is enhancing holiday pay with the introduction of ‘Rolled Up Holiday Pay’.

This new system-calculated pay element will be applied to a team member in their current pay period. It is calculated as 12.07% of basic pay, plus any holiday-payable pay elements that contribute to the team member’s gross pay for that period.

To improve accuracy in holiday pay calculations, a new “Holiday Pay” toggle is being introduced within pay elements. When enabled, this ensures that the corresponding pay element is included in the holiday pay calculation. The calculated amount will then be displayed as “Rolled Up Holiday Pay” for the current period.

Users can check whether ‘Holiday Pay’ is enabled for a pay element by clicking ‘View Details’ in the pay element settings.

By default, the toggle is set to ‘No’, and core pay elements cannot be edited.

To enable this option, users will need to duplicate or create a new pay element.

When duplicating or creating a custom pay element, you will have the option to enable ‘Holiday Pay’ for that element.

By default, the ‘Holiday Pay’ toggle will be disabled. If enabled, the pay element will be included in the ‘Rolled Up Holiday Pay’ calculation.

When adding a change to a team member in the current period, you can check whether ‘Holiday Pay’ is enabled by viewing the pay elements info button.

The same applies when opening the tax treatment dropdown at the bottom of the form, allowing for easy verification of holiday pay settings.

In the team members pay information a new section will be included to enable 'Rolled up Holiday'. This will be set to 'No' by default.

Once enabled, any pay elements with the ‘Holiday Pay’ toggle enabled will be added to the team member’s basic pay to form a subtotal. A 12.07% value will then be calculated from that total and applied as a new system-calculated ‘Pay Element’ in the team member's current period.

This value can also be viewed and overridden in the team member's pay preview statement. If the value is overridden, a tooltip will display the original value for reference.

If a team member with ‘Rolled Up Holiday’ enabled goes on any type of statutory pay, they will not receive the ‘Rolled Up Holiday’ calculation for that period.

Before the 12.07% calculation is applied, the system will check if the team member is on any statutory leave or schedule. If so, the calculation will return a 0.00 value for their current period.

However, you will still be able to override this value in the team member's pay preview statement. A tooltip will appear, notifying the user that the team member is receiving statutory pay for that period.

Once the statutory pay period ends and the ‘Rolled Up Holiday’ toggle remains enabled, the system will resume calculating the 12.07% value.

Currently, the pay calculator is run when you access the team section of the current period, applying the ‘Rolled Up Holiday’ pay element to all team members with the feature enabled in their pay information.

However, when your company exceeds a certain size, you will automatically land on the changes section of the current period.

A new button, ‘Refresh Changes’, will be available on the changes page.

The ‘Refresh Changes’ button will open a flyout form where you can select the specific updates you wish to apply. By selecting ‘Rolled Up Holiday Pay’ to update, this helps relieve unnecessary system pressure by only running the relevant calculations rather than the entire pay calculator.

Once refreshed, you will be able to view the current period changes for any team member with ‘Rolled Up Holiday’ enabled.

This action is not mandatory to apply the ‘Rolled Up Holiday’ pay element but serves as a viewing tool to see what changes are being applied in the current period. A tooltip will be displayed, showing the last time, the pay calculator was updated.

In addition to enabling ‘Rolled Up holiday’ for individual team members in their pay information, you also have the option to enable ‘Rolled up holiday’ for multiple team members at once.

The user will be able to select multiple team members in the team area of the app and enable the 'Rolled up Holiday' to those selected.

‘Holiday Pay’ will be included in all reports and documents. With the introduction of ‘Rolled Up Holiday Pay’, this information will be available for reporting and will appear on both PDF and online payslips.

This will be live start of business on the 11th of April.