Annual Leave Supplement - FAQs

Below you will find a series of frequently asked questions about the annual leave supplement. If you can't find the answer to your question here, or you have further concerns, please contact the Payroll department at payroll@mailbox.lboro.ac.uk. 

Annual Leave entitlements and payments are governed by the Working Time Directive (WTD) and Working Time Regulations (WTR) legislation. These regulations include provisions to pay average or enhanced annual leave pay to reflect a ‘normal’ working week of paid leave.  In January 2024, the government introduced reforms to simplify holiday entitlement and holiday pay calculations in the Working Time Regulations.  We have therefore taken the opportunity to review our practice and propose amendments to move towards full compliance.

The new pay element is an additional supplement on overtime and other qualifying additional payment ensuring that "normal pay" is maintained during the employees first 4 weeks of statutory annual leave. The new pay element ensures that overtime and other additional payments are factored into holiday pay.

The government has now provided additional clarification as to how holiday payments should ideally be calculated. A 52 week look-back period is the recommended methodology.  However, at the current time, as our system functionality doesn’t provide a mechanism to undertake this preferred method, we have therefore introduced a new pay element which is added to actual hours worked.

All substantive staff who receive overtime pay and other qualifying additional temporary payments are eligible for this new pay element.

The new pay element will be calculated as 20 x 260ths (or pro-rata equivalent) of the overtime and qualifying additional payments that employees receive. This proportion will be added to your pay to ensure that your "normal pay" whilst on annual leave is accounted for.

A new pay element will make the payment automatically on each occurrence of overtime or other additional pay in each payroll period i.e. pay as you earn, rather than at the point you take annual leave. The calculation is as below:

Extra monthly payment = (Additional Payment or Overtime divided by 260 Annual Working Days) multiplied by 20 days statutory annual leave

 

As an example, when the University pays a full-time employee £10 non-contractual overtime in a month, we would pay a supplementary annual leave payment of £0.77 (£10 / 260 x 20 pro rata for actual FTE) and show it separately on an employee’s payslip.

These are payments such as overtime or any fixed regular payments i.e. Split Duty, Standby, First Aid.

The implementation date for the new pay element will be 1st August 2024. All qualifying payments made after this date will include the additional percentage, with the first payment being received on the August pay day.

No, your annual salary will not change. The new pay element is an additional amount applied to overtime and other payments to ensure compliance with annual leave pay regulations.

Your payslip will show the new pay element as a separate line item, named either “Annual Leave Supplement” or “Annual Leave Supplement (Pensionable)”

The new pay element will be subject to the same taxes and deductions as your regular pay. There will be no change to the tax treatment of your earnings.

Where the supplement is applied to additional payments that are pensionable as per your scheme rules, the annual leave supplement will also be pensionable. Where is it applied to non-pensionable overtime or additional payments, the supplement will not be pensionable. If you receive a mixture of pensionable and non-pensionable payments, you will see two amounts for annual leave supplement on your payslip.

No. Payment is made monthly in each payroll period where overtime and other qualifying additional payments are made and not when annual leave is taken.

If these are fixed payments you receive every month that do not require you to claim, these are not included. This only applies to overtime and other claimed/temporary qualifying additional payments.

Most casual staff already receive a “Holiday supplement” as they do not have a bookable holiday entitlement. This payment already factors in any overtime or additional payments. We are extending this “Holiday supplement” to external examiners, guest speakers and other casuals who do not use dashboard, TMS or MyHR from 1st August 2024.

If you have any further questions or concerns, please contact the Payroll department at payroll@mailbox.lboro.ac.uk. We are here to help and provide any additional information you may need.