Can my staff buy holiday?
If a member of your staff asks for extra holiday – what do you say?
Your gut reaction will probably be No!
But if you allow the staff member to BUY holiday from you then it could work to your advantage. In today’s job market it can be expensive and time consuming to find the right people to join your team. Allowing staff to buy more annual leave can help you to retain staff and improve morale.
So what are the benefits to you?
- You will save the cost of the salary for the days bought and 13.8% employer’s national insurance on top of that.
- You may reduce the number of days absence for family emergencies or sickness.
To make this work you need to make sure that you could apply this to all staff if requested. A maximum number of days should be agreed to ensure you have enough staff cover your business. If you have to pay overtime or employ additional staff then it may not work for your business.
Calculate the daily cost for the staff member by taking the annual salary and dividing by 260 days. If this is a formal agreement you may want to agree a monthly reduction in salary, alternatively it can be on a pay as you go basis. Sometimes people change their minds when they realise the cost, so a pay as you go method can be more flexible.