There are multiple ways to pro-rate balances for mid year starters giving various options around how you utilize the pro-ration to handle working patterns and mandatory holidays.
As always, it is important to note that all calculations start off with the full entitlement for an employee based on their working pattern. This needs to include any mandatory day entitlement within the allowance if you want to display it in the time off donut.
To keep these calculations consistent the following terms will be used during the descriptions:
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ALLOWANCE: This corresponds to the employees full time off allowance as entered within their profile.
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DAYS: Number of days in the calendar year the employee has worked for the company.
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TOTALHOLIDAY: The number of mandatory holiday days that are in the complete current calendar year.
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FUTUREHOLIDAY: The number of mandatory holiday days that match the employees working pattern and fall either after their start date or before their leave date.
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FINALBALANCE: The final balance that will display for the user prior to any mandatory day deductions.
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FINALBOOKABLE: The final bookable balance after mandatory days have been deducted.
It is important to note that all balances are pro rated using a day based system. As such if you are moving to HRWize from a system that uses a monthly or weekly calculation, you may see some small differences in your balances.
Calculation Method 1: Entitled to a percentage of all days
This method is designed to match the HMRC standard calculation for statutory allowance. The system takes the entire balance entered including mandatory days and pro rates these values as a whole. It then separately pro rates the mandatory holidays and deducts this from the balance.
Calculation breakdown:
(ALLOWANCE/365) x DAYS = FINALBALANCE
FINALBALANCE - ((TOTALHOLIDAY/365) x DAYS) = FINALBOOKABLE
Calculation Method 2: Entitled only to days after they start
This method is designed to give the employee a standard bookable allowance based on a percentage of the allowance granted disregarding mandatory days then give them a specific allowance for mandatory days that fall on their working pattern. This allows you to cater for the exact mandatory days that fall within their employment separately to the holiday allowance.
Calculation breakdown:
((ALLOWANCE-TOTALHOLIDAY)/365) x DAYS = FINALBOOKABLE
FINALBOOKABLE + FUTUREHOLIDAY = FINALBALANCE
Calculation Method 3: Percentage and days after
This method is designed to be a hybrid of the 2 methods described above. In this method, the whole balance is pro rated similar to the percentage method but the days that fall onto the employees' working pattern are then deducted.
Calculation breakdown:
(ALLOWANCE / 365) X DAYS = FINALBALANCE
FINALBALANCE – FUTUREHOLIDAY = FINALBOOKABLE
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