Pro rata calculations
There's a lot of variation in the calculation of a pro rata, different companies, different countries, different regions have their own standards. Some use working days, some calendar days, some working weeks or months.
Here we'll cover the two instances where Timetastic offers to pro rata an employee's annual allowance and how they're calculated:
Adding a new user
If your employee is starting part way through their leave year, Timetastic has a relatively simple mechanism that generates a suggested pro rata. It's based only on a user's contractual allowance and the amount of time between their start date and the end of the current year. It does not consider a users work schedule or their entitlement to public holidays.
Before we explain this it's important to note that in Timetastic you can input any number into a user's allowance that you wish, you do not need to use Timetastic's suggested pro rata figures.
The calculation is:
Contractual allowance / 12
Multiplied by the number of months in employment, from start date to end of the leave year.
Using months in employment does mean that an employee will earn a full months allowance for the month they start in, irrespective of the date of the month they started i.e. someone starting on the 3rd of the month will earn a full months allowance, as will someone starting on the 23rd.
This approach is consistent with how Gov.uk calculate Statutory Allowance in the UK for someone who starts part way through a year, page 12 in the following booklet. This is based on the EU working time directive.
For clarity, Gov.uk adopted this approach in November 2019.
What the calculation doesn't cover:
- Part time workers: Timetastic calculation doesn't cover part time workers, because at the time you add a new user Timetastic doesn't know they are part time. Timetastic will not reference the work schedule when calculating a pro rata.
- Public holidays: If you enter your allowances in Timetastic 'net' of public holidays, then you might need to account for when, during the year, someone starts with you to account for how many public holidays are remaining in the year.
- Both situations above: If you have someone part-time, who, for example, doesn't work Mondays. Timetastic's calculation won't cover that.
In many respects these situations illustrate some of the complexities of calculating a pro rata.
If you have this kind of situation, or indeed you have your own formula to calculate a pro rata then please do stick to your own company policies. You don't need to accept Timetastic's suggestion.
Archiving a user
When an employee leaves your organisation and you're archiving their profile, Timetastic will offer to pro rata their annual allowance in line with their end date. This can be useful when trying to work out how much holiday pay an employee potentially owes or is owed.
The calculation is:
Contractual allowance multiplied by the number of days in employment, divided by the total number of days in the year.
The number of days in employment is based on the start of the user's leave year, or their employment start date if they're leaving in the same holiday year.
The calculation uses 'day in employment' for all employees, whether they have their allowance in day or hours.
Timetastic gives a summary of the pro-rata calculation along with any TOIL any forward allowance, then subtracts any deductible leave taken to give a final figure of allowance remaining, for example:
If your organisation has its own formula on how holiday entitlement is calculated when an employee leaves, please stick to your own company policies. You don't need to accept Timetastic's suggestion.