Holiday Pay

You are entitled to a minimum of 5.6 weeks of paid annual leave per year (normally equivalent to 28 days for full-time workers). The funding for your holiday pay is included in your contract rate, and we offer different processing options based on your preference.

The SmartWork holiday year runs from 1 January to 31 December.

When registering with SmartWork, you can select from the following two options:

Paid in advance

If you opt for your Holiday Pay to be “Paid in Advance,” it will be included in each payment you receive upfront.

Under this arrangement, an additional 12.07% of your basic pay will be paid to you in each pay period as holiday pay, and this amount will be clearly itemised on your payslip

Consequently, you will not receive any payment while you are on vacation or not working, as all the available income has already been paid to you. You have the flexibility to modify your holiday pay preference at any time by providing a written request.

Each year, you will have a statutory holiday entitlement of 28 days, which includes 20 days of annual leave and 8 Bank and Public Holidays. The holiday pay is already factored into the Contract Rate you agree upon with your agency or end client.

Retained (Accrued)

Your Holiday Pay can be retained in a designated ‘Holiday Fund’ and paid out when you take time off work. We hold back this amount before tax, which is then taxed when it is disbursed to you based on the duration of your annual leave.

Holiday pay can be released in different ways, such as the amount accrued in a single pay period, a combination of accruals, or as a lump sum.

If you wish to change your holiday pay option, please email our payroll team. If you have an accrued pot, your payslips will show the total retained amount, and we can confirm the overall value. To receive payment for your holiday pay, you will need to request it by email.

Please note that there is no financial difference between receiving your holiday pay in one way or another. It depends solely on personal preference, and your total income for the year will remain unchanged. Additionally, we must distribute holiday pay in the tax year it was earned, so neither option offers a tax advantage.

Please note that holiday pay can only be disbursed on your regular payday. For instance, if you typically receive payment on Fridays, we will also process any holiday pay requests that day. If you leave SmartWork, we will pay out any accumulated holiday pay balances.

Please note that any remaining funds must be paid out within the same year they were accrued. Our holiday year aligns with the calendar year, rather than the tax year.

If you have any questions or need further assistance with holiday pay and its procedures, please contact our compliance team. They can provide guidance and address any concerns you may have.

How Holiday Pay Accruals Are Paid

If you are on an accrued holiday pay scheme, holiday pay accrues each time you are paid, and the accrued amount is shown on your payslip.

When we receive a holiday pay request, we will pay you the full accrued holiday pay balance shown on your latest payslip. Once we process this payment, your holiday pay balance will reduce to £0.00. Holiday pay will then begin accruing again from your next payroll as you continue to work and receive payments.

Important Information

• Holiday pay accrues during each payroll run.
• Your accrued holiday pay balance is shown on your payslip.
• When a holiday pay request is processed, the full accrued balance must be paid.
• It is not possible to partially release an accrued holiday pay balance.
• Following payment, your holiday pay balance will reduce to £0.00.
• New holiday pay accruals will start to build again from your next payroll.

What are the consequences of choosing either option?

Your contract rate already includes a percentage for holiday pay. You decide how to receive this portion of your income.

Overall, your total income throughout the year will remain the same. There is no financial advantage to choosing one holiday pay option over the other; it is purely a matter of personal preference. Additionally, we must pay out the holiday pay in the same tax year it was earned, so neither option offers a tax benefit.