If an employee receives a wage for normal working hours which does not vary with the amount of work done, you pay the net fixed wage, including any fixed amounts normally paid on a regular basis (for example, bonuses or commission).
If an employee receives a wage for normal working hours that does vary with the amount of work done, you will have to calculate what his (or her) average hourly rate was over the past 12 weeks, ignoring any premium element for overtime. Holiday pay is calculated by multiplying the average number of normal weekly working hours by the average hourly rate.
If there are no normal working hours, holiday pay is calculated from average weekly pay over the previous 12 weeks. The Working Time Regulations set out a fairly complicated method for calculating holiday pay sums. Care should be taken in approaching these calculations, and legal advice should be sought.
