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An Employer's Guide to Payroll

Payroll Guide Contents > Minimum wage, holiday entitlements and statutory sick, maternity and paternity pay

4. Minimum wage, holiday entitlements and statutory sick, maternity and paternity pay

Minimum wage

These rates are set by the State from time-to-time and employers have a lawful obligation to pay no less. There are reduced rates for younger workers under the age of 21 and apprentices but schoolchildren have no such entitlement. If you engage staff on minimum rates we will keep you abreast of rate changes.

Holiday Entitlements

All employees, including part-timers, have entitlements fixed by law, presently to 5.6 weeks paid annual leave but capped at 28 days (equivalent to a 5-day week). It is calculated by reference to the employee’s usual working week.

Bank and public holidays may be counted in the total if payment is made for them. Entitlement is earned by reference to the period of employment i.e. it accrues throughout and any balance due must be paid to the employee on leaving. It is usual for the employer to establish a holiday year for these purposes, either the calendar year or some other.

The entitlement accrues throughout the period of employment, including through periods of sickness absence (can be problematic in a case of extended illness).

While the employee has the right to paid holidays, the employer directs when they may be taken.

Statutory Sick Pay (SSP), Maternity and Paternity Pay

These are Social Security benefits that are distributed through the payroll. The employer acts as the (unpaid) agent of the State in doing so (and may also bear all or part of the cost of the benefit). We attend to the compliance as part of our normal payroll service to you – there is no additional charge.

But note that SSP is only a minimum entitlement – every employer is fully entitled to provide more generous sick pay benefits if it wishes.

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Disclaimer

While we hope the above has been found to be useful it is intended only as a general guide, may not reflect the very latest developments in law, and cannot be a substitute for professional advice. We cannot accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this guide.