Guidance for holiday pay changes

The reforms to the Working Time Regulations to simplify holiday entitlement and holiday pay calculations are now live.

To help employers get to grips with the new rules – which mostly focus on how pay should be calculated for part-year and irregular-hours workers – the government has published online guidance.

Most of the changes apply from leave years beginning on or after 1 April 2024, including the introduction of a new accrual method for irregular hours workers and part-year workers of 12.07% of their actual hours worked in a pay period.

However, some changes applied from 1 January. These included changes relating to the amount of leave affected workers can carry over into the following year and the removal of regulations that allowed workers to carry over leave that could not have been taken because of the Covid-19 pandemic.

The holiday pay guidance also sets out the definitions for an irregular-hours worker and part-year worker, and can be found on the gov.uk website

Minimum wage increases

From April 2024, the minimum wage, also known as the National Living Wage, increased by over a pound an hour to £11.44 per hour. The increase applies from 1 April, or the first full pay reference period on or after that date.

Eligibility for the National Living Wage was also extended by reducing the age threshold to 21-year- olds for the first time.

Minimum wage rates have increased to £8.60 per hour for 18- to 20-year-olds. The apprentice rate continues to be aligned with the 16- to 17-year-old rate, which is £6.40.

In February 2024, the Department for Business and Trade named more than 500 employers that had failed to pay the minimum wage. The businesses were ordered to repay workers and faced an additional financial penalty.

Changes ahead for payrolling benefits in kind

Payrolling benefits in kind is already an option available to employers. From April 2026, however, it is set to become compulsory for all employers. We’ve written this article – Be ready for changes to benefits in kind reporting – to provide more information and help organisations prepare.

If you’d like to learn more about how these changes could impact your organisation, speak to your Shipleys contact or one of our specialists shown on this page.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.

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