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UK Payroll: Reporting - Run a report to calculate holiday pay based on a 52 week average

It would be really useful for those of us in the UK if we could run a report to calculate holiday pay based on a 52 week average. Legally this has been a requirement since 2020.

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Michelle Lockwood shared this idea  ·   ·  Report…  ·  Admin →
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under review  ·  AdminKelly Munro (Community Manager, Xero) responded  · 

Hi everyone, thanks for your ongoing interest and support for this idea.

We understand the complexities surrounding calculating holiday pay for employees in the UK, and acknowledge the need to provide a helpful way to calculate an accurate rate in which to pay out their holiday.

Our product team are excited to share that this is an area we are currently looking into developing.

Your feedback and ideas are extremely important to us. As such, we’d like to reach out to our valued community members to get involved in prototype testing, commencing later this month.

The testing will involve using a prototype tool to assess the usability of a proposed way of calculating Holiday Pay in Xero. We'd encourage users that feel strongly about this area of payroll to sign up and welcome users of all experience levels.

Given the popularity of this idea we expect spaces to fill up fast. We'll close the form once we have enough interest. We also want to make sure we test our concept with a wide range of customers, so you might not be selected for testing depending on the level of interest we receive - Fill out this form to join ✍️

Thanks everyone and we look forward to connecting with you.

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  • Jan Thompson commented  ·   ·  Report

    This would really be so useful, and would certainly be a contributing factor for me to move payroll software if it is not made accessible soon. As a legal requirement that has been in place in the UK for the last 4 years it is an absolute necessity.

  • Martina Ford commented  ·   ·  Report

    No they haven’t and no idea if or when. I gave them a low rating on Trustpilot and they told me that we could manually adjust pay. Same for Smartpension..

  • Carol Dawson commented  ·   ·  Report

    Have Xero updated any of their reports ot include average holiday pay reporting?

  • Darren Fullthorpe commented  ·   ·  Report

    This lack of functionality is stopping our client using Xero payroll , so going elsewhere !!

  • Louise Christie commented  ·   ·  Report

    As this is a legal requirement it makes sense that our payroll software is up to date and in line with current legislation, and be able to do this calculation.

  • Martina Ford commented  ·   ·  Report

    It doesn't look as if anyone at Xero is interested. Legal requirements should be included in the system asap after being announced

  • Rachael Watt commented  ·   ·  Report

    It would be substantially beneficial to have the ability to run a report to calculate holiday pay based on 52 weeks of working rather that manually calculating and having a larger margin for error and possible penalties. In the UK this has been a legal requirement since 2020.

  • Martina Ford commented  ·   ·  Report

    come on Xero.. can you please listen to us and add this function? Or will you pay our penalties should we get the manual calculations wrong?

  • Leona Kelly commented  ·   ·  Report

    UK Payroll: Reporting - Run a report to calculate holiday pay based on a 52 week average
    This is a critical requirement for UK payroll calculations. This affects employers whose workers have regular overtime aswell as those with zero hours workers

    This should be a new holiday option though, not editing an existing holiday setting in Xero - as many xero users will already be manually accounting for this statutory requirement and if an existing setting us changed it will result in errors for them!

    https://www.gov.uk/government/publications/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay--2#how-the-law-has-changed-as-of-6-april-2020

    Employment Appeal Tribunal (EAT) – UKEATS/0047/13 - Bear Scotland Ltd v Fulton (2014)
    The EAT found that regular overtime, which employees are obliged to perform if requested by the employer, should be included for holiday pay purposes...

    EAT – UKEAT/0334/16 - Dudley Metropolitan Borough Council v Mr G Willets and others (2017)
    This case concerned 56 council workers who repair and improve housing. The EAT ruled that payments for purely voluntary overtime should be included in holiday pay if they are regular enough to constitute ‘normal pay

    There are many more UK legal cases where employer has lost tribunal case...

  • Maria Murphy commented  ·   ·  Report

    Due to the court case in July 2022 which states those on 0 ours contract can't accrue holidays at the rate of 0.1207. Does Xero have the intention of enabling a functionalty for it to look at the hours of 52 weeks up to a maximum of 104 and average out to comply with the new regulations?

  • Lana Laing commented  ·   ·  Report

    As this is a statutory requirement it would be extremely helpful if xero could run a report to show this instead of multiple calculations being done every month for numerous employees. further than this when holidays are booked through xero should the calculation be automatically done via the system when paying employees. So when you are running payroll for the person where the holiday hours show the box with the holiday pay rate should be auto populated with the 52 weeks average calculated.

  • Ann Mogg commented  ·   ·  Report

    We need to be able to set each individual amount of days due based on the hours they work regularly and to be able to customise it when necessary.

  • Fiona Thomas commented  ·   ·  Report

    This is a critical requirement for my practice as we have many clients whose staff are on zero hour contracts and therefore require their holiday pay to be based on a 52 week average. I did not know it was a requirement since 2020 but I have been informed by our HR consultant that there are many employment cases that are arising as a result of this not having been adopted in payroll practice.