How to Calculate Pro Rata Leave
Pro rata leave refers to the holiday entitlement calculated in proportion to the amount of work an employee does compared to a full-time equivalent. This is crucial for part-time workers or employees who join or leave a company part-way through the annual leave year.
Under employment law in many jurisdictions (including the UK Working Time Regulations), part-time workers must not be treated less favorably than full-time workers. This means their holiday entitlement must be a fair proportion of the full-time allowance.
The Pro Rata Leave Formula
The calculation generally follows this logic:
(Hours Worked ÷ Full-Time Hours) × Full Annual Entitlement
If the employee has not worked the full year, you must also factor in the duration of employment:
Step 1: Calculate the "FTE" (Full Time Equivalent) ratio by dividing contracted hours by full-time hours.
Step 2: Multiply the FTE ratio by the standard annual leave entitlement.
Step 3: If working a partial year, multiply the result by (Months Worked ÷ 12).
Example Calculation
Let's look at a practical example. Imagine a company offers 28 days of annual leave to full-time staff who work 40 hours a week.
- Employee A works part-time, 20 hours per week.
- Calculation: (20 ÷ 40) = 0.5 (or 50%).
- Entitlement: 0.5 × 28 days = 14 days.
If Employee A only started working 6 months into the year:
- Partial Year Factor: 6 ÷ 12 = 0.5.
- Final Entitlement: 14 days × 0.5 = 7 days.
Why calculating by hours is often better
While calculating by days works for regular shifts, calculating by hours is often more accurate for employees working irregular shift patterns or different hours on different days. Converting the entitlement into a "pot of hours" prevents confusion when an employee takes a half-day or a shift that is longer than standard.
Bank Holidays
Remember to check if your full annual entitlement figure includes bank holidays. In the UK, the statutory minimum is 5.6 weeks (28 days for a 5-day worker), which often includes the 8 bank holidays. Pro rata workers are entitled to a pro-rated portion of bank holidays as well, usually rolled into their total leave allowance.