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Tax on holiday pay 18 Feb 2016

Use the extra pay tables to get holiday pay correct:

  • If the employee is leaving unless the holiday forms part of the 8% of gross earnings – see below.
  • If you are paying a lump sum holiday pay payment in advance.
  • For cashed-up annual leave.

Use ordinary tables and spread out the income when:

  • Holiday pay is in substitution of salary for annual paid holiday.
  • Holiday pay forms part of the 8% of gross earnings.

These rules will apply from 1 April 2016.

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