First published: August 29th, 2016
Last updated: March 3rd, 2022
The Organisation of Working Time Act 1997 (the Act) governs employee holidays and sets out how to calculate holiday pay entitlement in Ireland.
The introduction of the right to paid holidays from work came about under EU law to safeguard employee health & safety by ensuring they receive adequate rest and recovery.
So, when you need to make your calculations, focus on the minimum number of paid holiday days an employee should receive under the Act.
The Act includes a holiday pay calculator, which you can use for full-time and part-time employees — we take a look at that further below.
How to calculate holiday pay in Ireland
So, how to calculate holiday pay in Ireland. Let’s get straight into it…
Calculate the number of paid holiday days an employee receives by reference to the amount of work the employee completes during the leave year.
How to calculate holiday entitlement depends on the type of employee concerned.
When you need to work out holiday entitlements, the following options cover both full-time employees and how to calculate holiday entitlement for part time workers.
You can calculate the statutory minimum paid holiday entitlement for employees using the following methods:
- An employee who works at least 1,365 hours in a year receives the full entitlement of four working weeks of annual leave (20 paid days’ holidays).
- An employee who works at least 117 hours in a month receives one-third of a working week for each month in the leave year.
- Part-time employees have entitlement to 8% of the hours worked in a full leave year (but subject to a maximum of four working weeks).
- An employee who works for eight months or more in the annual leave year has entitlement to an unbroken period of two weeks’ annual leave.
Important points to remember
There's no qualifying period for holidays and all employees, regardless of status or service, qualify for paid holidays. All time worked qualifies for paid holiday time:
- The Act applies to any person working under an employment contract/apprenticeship, employed through an agency or in the service of the State.
- In the case of agency workers, for the purposes of the Act, the party who pays the wages is responsible for annual leave entitlement.
- Provide annual leave entitlement to the employee within the leave year or, with the employee's consent, within the first six months of the following leave year.
- It’s the responsibility of the employer to ensure that employees take their full statutory leave allocation within the appropriate period. Employees may, with the consent of the employer, carry over holidays in excess of statutory minimum leave to the following leave year.
- In the event the employment relationship ends, you must compensate the employee for any untaken annual leave accrued during the leave year in which their employment contract ceases. If the employment ceases in the first half of the leave year, the employee must receive compensation for any annual leave accrued in the current and previous leave year.
- Legislation allows employers to select any 12-month period as the leave year. However, for the purpose of the Act, the leave year runs from March 31stto April 1st.
- It's in breach of the Act to pay in lieu of the statutory minimum holiday entitlement unless the employment relationship ends.
- You must keep records of annual leave and public holidays for a period of three years.
Other important entitlements
Under the Act, the minimum annual leave entitlement for employees who work at least 1,365 hours per year is four weeks. This does not necessarily mean 20 days. Instead, it refers to four of the average weeks worked by the employee. Where employees work fewer hours, calculate entitlements on a pro-rata basis.
When calculating how many days holiday to which an employee can take, you should include all hours worked including time spent on:
- Annual leave
- Maternity and parental leave
- Force majeure
- Adoptive leave
- The first 13 weeks of carer’s leave
Following legislation introduced on September 1st, 2015, you should also include any period of medically certified sickness absence.
Ad-hoc overtime doesn't impact entitlement. Include regular and rostered overtime when calculating total hours worked.
Employees don't accrue annual leave while on uncertified sick leave in Ireland, temporary lay-off, or career breaks.
Sickness during a period of annual leave with a supporting medical certification doesn't count as annual leave.
Need our help calculating holiday entitlements?
For advice on calculating holiday entitlements from an expert, call us any time day or night on 0818 923 923.