The average holiday calculation provides you with an average weekly pay value so that you can calculate holiday pay accurately.
Before you set up average holiday pay, there are some things you should consider:
Only pay elements flagged as Use for Average Holiday Pay are included in the calculations.
If required, you can exclude some of the most recent weeks.
You can include statutory pay and occupational pay in the calculation.
If you have a gross pay history from a previous payroll system, you can enter or import this.
To set up average holiday pay in SelectPay, follow each of the sections below in order.
Configure pay elements
To include relevant pay elements in the average holiday pay calculation, you need to flag them as Use for Average Holiday Pay. To do this, follow the steps below.
Click Payroll, then click Pay Elements.
Double-click the relevant pay element, then click the General tab.
Select the Use for Average Holiday Pay check box.
Click Save and Close.
📌Note: If the pay element is already assigned to employees, you will need to update standard pay elements to apply this to their standard pay.
System configuration
To update the default for new employees, follow the steps below.
Click System, then click Application Configuration.
Click Payroll Configuration, then click the Holidays tab.
In the Default - Show averageable gross pay field, enter the relevant value.
In the Default - Holiday pay excludes last field, enter the relevant value.
If required, select the Include Statutory Pay and Occupational Pay check box.
Click Save and Close.
Populate gross pay history
If the employee's gross pay history is blank, for example, if Use for Average Holiday Pay has not been used before, you can enter this manually. To do this, follow the steps below.
Click Payroll, then click Employees.
Double-click the relevant employee, then click the Holidays tab.
In the Show Averageable Gross Pay For field, enter the relevant value.
Check the gross pay for each period and amend if necessary.
If required, in the Exclude Last field, enter the relevant value.
Click Save and Close.
Process holiday pay
In run payroll, the Holiday tab shows the calculated weekly average pay value. From here, you can select whether to exclude the most recent weeks, which may result in a recalculation.
📌Note: This calculation is an approximation based on the employee's contracted working days and hours.
To process holiday pay for an employee based on this calculation, follow the steps below.
Click Payroll, and then click Run Payroll.
Right-click in Amend Pay, then click Add Pay Element.
Add one of the following:
AUTO DAILY HOL PAY: The daily holiday pay element.
AUTO HOURLY HOL PAY: The hourly holiday pay element.
AUTO WEEKLY HOL PAY: The weekly holiday pay element.
Enter the relevant quantity, then click Calculate.
Check you're happy with the figure, then click Save & Close.