Do contractors get holiday pay?

All umbrella company contractors are entitled to 28 days’ holiday (or ‘annual leave’) per year. This amount may change if the end-user client allows a higher number of days. The agree number of days will be clearly stated within your employment contract. 

How does it work?

At Imperium Contractor Solutions, we will automatically pay your holiday pay within your take home every time you are paid. This is our standard practice unless you contact us to confirm you would like us to accrue (save) your holiday pay until you request it to be paid out. Therefore, you have full control over how we handle your holiday pay amount. Each time we pay you your holiday pay (whether at once or week by week (month by month), the amount will be included in your pay slip.

What is my annual leave entitlement?

Under our employment contract you are entitled to annual leave from the 52-week calendar year. This means approximately 5.6 working weeks (28 days’) leaving 46.4 working weeks. Our mock calculations of your take home assume we are paying out your holiday pay and the annual column is based on 46.4 weeks. If you are to be paid on a weekly/ monthly basis then we work out your holiday pay at 12.07% of your income each week/ month. 

Accrued or rolled up?

The terminology you may have heard being used in relation to holiday pay is:

• ‘Accrued’ (saved) – This means we deduct your holiday pay amount and save it a side for you. This will be paid out to you following your request, at the end of the financial year or when you leave our umbrella company service.

• ‘Rolled up’ (paid within your take home pay) – This means your holiday pay will be calculated at 12.07% of your weekly/monthly income and is included within your take home pay so should you take time off you will not receive any payment as you have been paid everything up to date.

Why and when is my holiday pay taxed?

As well as any bonuses or overtime, holiday pay is taxable income and therefore subject to statutory deductions such as Income tax and National insurance contributions.

If your holiday pay is accrued, it will be taxed before it is paid out to you upon request, at the end of the year or if you leave our umbrella service.

If you holiday pay is rolled up then it will be taxed prior to us making any payment to you and therefore you will not be subject to any sort of tax bill once paid making your take home pay yours to spend on whatever you wish.

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• Imperium Limited Company Solutions
• Why work with us