Difference Between Annual Leave and Holiday Pay

All work and no play makes Jack a dull boy. Though cliché, human beings resonate to this all the time. With work being the center of life, taking time off is equally important for the body, mind, and soul. To guarantee this, workplace regulations have been set to ensure there is a balance between work and other aspects of life. Some of these include annual leave and holiday pay.

What is Annual leave?

This is paid time off work offered to employees who have worked in the organization for 12 months consecutively by the employers and is regulated by labor laws in a country. An employee has no leave days during the first year of employment. However, employers allow for annual leave days, which are deducted from the total number of annual leave days for the next year. The number of annual leave days, however, differ from country to country and are treated as a right or a peak to employees.  An employee, however, should give advance notice to allow the employer to organize for adequate staffing during the annual leave period. It should be noted that weekends and national holidays do not count as annual leave.

What is Holiday pay?

These are dues paid for work carried out for days set as holidays, where other businesses are closed such as Christmas day. Though not mandatory, holiday pay is a great incentive for employees. However, it is mandatory for employers only if there is a contract between the two parties stipulating that the employee should receive holiday pay. An employee therefore needs to discuss holiday pay with the employer before commencing a job.

Similarities between Annual Leave and Holiday Pay

• Both refer to time off work
• Both aim at creating a balance between work and other aspects of life

Differences between Annual Leave and Holiday Pay

Definition

Annual leave refers to paid time off work offered to employees who have worked in the organization for 12 months consecutively by the employers and is regulated by labor laws in a country. On the other hand, holiday pay refers to dues paid for work carried out for days set as holidays, where other businesses are closed such as Christmas day.

Regulation

Annual leave is regulated by labor laws in a country. On the other hand, holiday pay is regulated by an organizations structure.

Obligations

While annual leave is mandatory for an employee who has consecutively worked for 12 months in an organization, holiday pay is only mandatory where there exists a contract between an employer and employee stipulating that the employee should receive holiday pay.

Annual Leave vs. Holiday Pay: Comparison Table

Summary of Annual Leave vs. Holiday Pay

While annual leave refers to paid time off work offered to employees who have worked in the organization for 12 months consecutively by the employers, and is regulated by labor laws in a country, holiday pay refers to dues paid for work carried out for days set as holidays, where other businesses are closed such as Christmas day. Annual leave is mandatory as set by a country’s labor laws while holiday pay is not mandatory, but is an agreement between an employer and an employee.

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