First published: August 29th 2016
Last updated: October 9th 2023

The Organisation of Working Time Act 1997 (the Act) governs employee holidays and sets out how to calculate holiday pay entitlement in Ireland.

The introduction of the right to paid holidays from work came about under EU law to safeguard employee health & safety by ensuring they receive adequate rest and recovery.

The Act also usefully includes a holiday pay calculator that you can use for full-time and part-time employees.

How to calculate holiday pay in Ireland

As an employer, you have to provide staff with minimum paid holiday entitlements under the Act.

You calculate the number of paid holiday days an employee receives by reference to the amount of work the employee completes during the leave year.

How you calculate holiday entitlements will also depend on the type of employee concerned.

When you need to work out holiday entitlements, some options will work better for full-time employees while others are more appropriate for part-time workers.

You can calculate the statutory minimum paid holiday entitlement for employees using the following statutory guidelines:

• An employee who works at least 1,365 hours in a year receives the full entitlement of four working weeks of paid annual leave.
• An employee who works at least 117 hours in a month receives one-third of a working week for each month in the leave year.
• Part-time employees have a statutory entitlement to 8% of the hours worked in a full leave year (but subject to a maximum of four working weeks).
• An employee who works for eight months or more in the annual leave year has entitlement to an unbroken period of two weeks’ annual leave.

Important points to remember

There's no minimum service requirement for paid annual leave and all employees, regardless of status or service begin accruing paid holiday entitlements from the day they start work.

All time worked qualifies for paid holiday time. Ad-hoc overtime doesn't impact an employee’s holiday entitlement. You should however include regular and/or rostered overtime when calculating total hours worked.

You should note the following conditions that apply to paid annual leave:

• The Act applies to any person working under an employment contract/apprenticeship, employed through an agency or in the service of the State.
• In the case of agency workers, for the purposes of the Act, the party who pays the employee’s wages is responsible for annual leave entitlement.
• The employee’s annual leave entitlement must be used within your leave year or, with the employee's consent, within the first six months of the following leave year.
• It’s the responsibility of the employer to ensure that employees take their full statutory leave allocation within the annual leave year.
• Employees may, with the consent of the employer, carry over holidays in excess of statutory minimum leave to the following leave year.
• If the employment relationship ends, you must compensate the employee for any unused annual leave accrued during the leave year in which their employment contract ceases.
• If the employment ceases in the first half of the leave year, the employee must receive compensation for any annual leave accrued in the current and previous leave year.
• The Act allows employers to select any 12-month period as their leave year. However, if you don’t confirm the start and end dates of your leave year, the default leave year under the Act runs from 1st April to March 31st each year.
• The Act prohibits payment in lieu of providing the statutory minimum holiday entitlement. The only time payment in lieu of providing paid annual leave is permitted is when the employment relationship ends and the employee has unused annual leave entitlement.

Record keeping

You must keep records of annual leave and public holidays for a period of three years.

Accruing annual leave entitlements on sick leave

Following legislation introduced on September 1st, 2015, you should also include any period of medically certified sickness absence in your paid annual leave calculations.

Employees don't accrue annual leave while on uncertified sick leave in Ireland, temporary lay-off, or career breaks.

Employee illness while on holiday

A period of illness during an employee’s time off on annual leave does not count towards the employee’s annual leave entitlement provided the employee provides medical certification confirming their illness.

The employee can therefore use their paid holiday entitlement at another time if their scheduled holiday was interrupted by illness.

Final paid holiday considerations

Under the Act, the minimum annual leave entitlement for employees who work at least 1,365 hours per year is four weeks. This does not necessarily mean 20 days though it often is for employees that work five days a week. Instead, it means four average or typical weeks worked by the employee.

When calculating how many days’ holidays an employee can take, you should include all hours worked including time spent on:

• Annual leave
• Maternity, paternity, parent’s and parental leave
• Force majeure
• Adoptive leave
• The first 13 weeks of carer’s leave.

Need our help calculating holiday entitlements?

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