Holiday Pay

Your entitlement to paid annual leave is a minimum of 5.6 weeks 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 implies that 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

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, the total retained amount will be visible on your payslips, and we can confirm the overall value. To receive payment for your holiday pay, you will need to make a request via email.

Please be aware that there is no financial distinction in receiving your holiday pay in one way or another. It solely depends on personal preference, and the total income you receive throughout the year will remain unchanged. Additionally, we must distribute holiday pay in the tax year it was earned, so there is no tax advantage in either option.

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

It is important to mention 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 inquiries or require further assistance regarding holiday pay and its procedures, please do not hesitate to contact our compliance team. They are available to provide guidance and address any concerns you may have.

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, the total income you receive 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 are required to pay out the holiday pay in the same tax year it was earned, so there is no tax benefit to either option.