Call Us 0800 10 10 38

Annual leave – What is cashing up?

By SmartPayroll | October 17, 2013

Provided they are a permanent employee, your staff are entitled to a minimum four weeks holiday (20 days) annually after the first year of employment. Some employers opt for five weeks annual leave.

Quick tips for managing annual leave

– Make sure you have a leave form template that is easily accessible for your employees.

– Have your team members fill out and sign this form if they want a holiday.

– Keep a copy in the employee’s file as a record to protect both parties in the case of a dispute.

Getting paid out leave entitlement

You may have heard about a law change that allows employees to ‘cash up’ leave. So what’s this all about?

As of 1st April 2011, employees can get up to one week of their four weeks’ leave paid out to them through the next payroll. This should show up as a separate item on the payslip. Such a request may be for less than a week and taken in parts over the year.

Leave as a payment can only be made if your employee requests this in writing. You as an employer can consider whether or not to approve the cashing up of leave. If cashing up is not going to be practical for your business, you may implement a policy of no cashing up of leave.

Cashing up leave may be a beneficial decision for both parties – an employee may need the extra money and the employer doesn’t lose a week of productivity from that staff member.

Have more questions about paying leave? We can help!

If you want some guidance around paying out leave or any other payroll queries, just let us know by phone (0800 10 10 38) or message.