We are often asked why, when using the As Per Act method of holiday pay calculation, only full days owing are shown on payslips rather than fractional days, preferably to two or three decimal places.

To fully answer this question, it is necessary to understand the legislation regarding holiday pay entitlements. If unsure, have a glance at our annual holiday entitlements tutorial.

Section 15 of the Holidays Act 2003 provides for 4 weeks holiday every year, rather than an incremental entitlement.

In other words, the law states that no holiday days are due throughout the year, and then 4 weeks become due all at once, after a full year.

Section 20 provides that with the agreement of a worker and their employer, annual holidays may be taken in advance, and it is through the provisions of this section that most firms operate, albeit unwittingly.

Ace Payroll provides an estimate of the number of days owing in advance, and it is this estimate that is shown on payslips.

The figure cannot be exact because

The answer to the question is that the figure shown on payslips is an estimate of days owing in advance, and to show an estimate of anything happening in advance to two or three decimal places is a charade.

Note there is a facility in Ace Payroll to turn off the day estimation.

With the day estimation turned off, there is no reason why the days owing could not be shown to multiple decimal places because an exact figure would be reported rather than an estimation. Interestingly, we have never had a request for this from a client that does not use the day estimation facility.