Should commission payments be included in the calculation of holiday pay?
Yes. The method for calculating holiday pay is set down in the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (S.I. No. 475/1997). The determining factor is whether the employee's rate of pay varies or not in relation to work done. This is because holiday pay is calculated according to an employee's normal weekly rate of pay.
Where an employee's rate of pay varies in relation to work done (e.g. if they are paid by commission), the rate of pay shall be the sum that is equal to the average weekly pay (excluding overtime) calculated over a 13 week period that was last worked before the leave.
Where an employee's rate of pay does not vary in relation to work done (i.e. salaried employees), the rate of pay shall be the sum, including any regular bonus but excluding overtime, that is paid in relation to the normal weekly working hours last worked by the employee before the annual leave.
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