Schools and MATs (Multi Academy Trusts) run on the dedication of term time staff. From teaching assistants and midday supervisors to site management and admin teams, these essential workers keep the school functioning.
But for in-house school payroll teams, accurately calculating their holiday pay has always been a payroll challenge.
Following recent changes to the Working Time Regulations, the rules for calculating holiday pay have shifted significantly, particularly for “part-year employees”, those contracted to work only part of the year with unpaid periods of at least a week. If your internal finance team is currently struggling with these changes, you are sitting on a mess of compliance issues.
The new 12.07% calculation
For years, schools have struggled with how to fairly calculate leave for staff who don’t work a standard 52-week year. Under the new guidelines, employers can now use a flat 12.07% rate to calculate holiday pay for part-year and irregular hours workers.
This percentage represents the statutory minimum 5.6 weeks of holiday, expressed as a percentage of the remaining 46.4 working weeks in a year.
Furthermore, schools now have the legal option to use “rolled-up holiday pay.” This means holiday pay can be included as an uplift in the employee’s regular pay packet as they earn it, rather than paying it separately when the employee actually takes their annual leave.
The 52-week reference period problem
While the 12.07% rule sounds simpler on paper, the reality of education payroll is rarely straightforward. What happens when a term-time worker goes on statutory maternity leave or long-term sick leave?
Under the new rules, holiday entitlement continues to accrue during these absences. To calculate this, you must look back over a 52-week reference period to find their average weekly hours, explicitly excluding any weeks where they were not paid. For term-time staff who have built-in unpaid weeks during school holidays, manually calculating this average across a fluctuating 52-week history can be an admin nightmare.
Why your school’s spreadsheet can’t handle it
Because education payroll involves so many varying contracts, split roles, and term-time nuances, a generalist payroll provider or a manual spreadsheet simply will not cut it. Trying to calculate average reference periods manually leaves your school or MAT wide open to underpayments and HMRC penalties.
At Ascend Education, our systems are built to handle education payroll. Our team understands the 52-week reference periods, the 12.07% accruals, and the rolling holiday pay and uses this expertise to ensure that your support staff are paid perfectly, every single time.
Let’s have a chat about how we can transform your payroll.
