Average Holiday Pay Top Up compares an employee’s contractual hourly rate with their average hourly rate based on qualifying pay history. Where the average hourly rate is higher, Cezanne calculates and pays the difference as an Average Holiday Pay Top-Up.
Before you begin
Ensure:
- Payroll has been configured.
- The required pay codes have been created.
- Historical Pay History has been imported, or future payruns will be used to populate Pay History automatically.
| Jump to section |
| Configuration steps |
| How the 52-Week average is calculated |
| Review the calculated Holiday Pay Top-Up |
| Populate Pay History |
Configuration Steps
To use Average Holiday Pay Top-Up, settings must be configured in two areas:
- Absence Plan Type Payroll Settings
- Payroll Settings - Pay Code Mappings
Step 1: Configure the Absence Plan
- Open the required Absence Plan Type
- Navigate to the Payroll Settings section
- Set Holiday Pay Calculation to Top-Up Only (Difference)
- Select the week from which Pay History should begin being populated
- If required, complete the Working Hours Per Day field
📝 Note
The Working Hours Per Day field is only used when Timesheet Tickbox functionality is enabled. If employees using the same absence plan work different daily hours, this value can be overridden on the employee's Payroll Options record.
Step 2: Configure Pay Codes
- Go to Payroll Settings then Pay Codes
- Open each pay code that should be included when calculating Average Holiday Pay
- Select Use for Holiday Pay Top-Up
- Save your changes
Keep in mind
Only pay codes that are subject to both Tax and National Insurance are available for use as Holiday Pay Top-Up pay codes.
Step 3: Configure Pay Code Mappings
- Go to Payroll Settings then Pay Code Mappings
- Select the pay code to use for Holiday Top-Up Pay Code
- Save your changes
This pay code will be used whenever an Average Holiday Pay Top-Up payment is generated during payroll processing.
How the calculation works
Average Holiday Pay Top-Up uses the employee's Pay History to determine whether additional holiday pay is due.
The calculation:
- Uses the latest 52 paid weeks.
- Considers qualifying weeks within the previous 104 weeks.
- Calculates an average hourly rate using qualifying earnings and hours worked.
- Compares the average hourly rate with the employee's contractual hourly rate.
- Pays only the difference when the average rate is higher.
| Average Hourly Rate Formula |
|
Average Hourly Rate = Total Amount Paid ÷ Total Hours Worked |
Example
An employee has:
- Contractual day rate: £200.00
- Average holiday pay day rate: £207.69
When one day's annual leave is taken, Cezanne Payroll automatically generates a Holiday Pay Top-Up of £7.69.
Review the calculated Holiday Pay Top-Up
Once the payroll period has started and the Payroll Summary Report has been generated:
- Open the Payroll Summary Report
- Navigate to Absences then Average Holiday Payments
- Select the required employee to view the calculation.
If required, you can:
- enable Override Total Holiday Pay,
- enter a replacement value,
- save the override.
When the payrun is processed, Cezanne automatically creates a pay line using either the calculated value or the overridden value. After the payrun has been finalised, the related absence record is automatically marked as paid.
Populate Pay History
Average Holiday Pay calculations rely on the employee's Pay History.
Pay History can be populated by:
- importing historical payroll data using the Pay History import template, then
- automatically creating records from finalised payruns.
Keep in mind
Pay History records created automatically from payruns are generated only after the payrun has been finalised. Previously finalised payruns cannot be backfilled into Pay History.
Related Articles:
- 52 Week Average Holiday Pay
- Import Pay History
- Configure Payroll Pay Codes
- Configure Absence Plan Types