Holiday Trading is a simple yet effective employee benefit that allows staff to exchange part of their salary for increased annual leave entitlement.
Whilst employers tend to standardise the amount of annual leave they give to staff, the reality is that different people want more or fewer holiday days depending on their circumstances.
With the growing trend to offer flexible working as standard, many employers are responding to demand and refreshing old policies.
Offering employees the option to trade holiday gives them more control over their time. For employers, it offers a way to save money on their salary budget, provides another strand to their Employer Value Proposition (EVP) and can help to cultivate a happier and more motivated workforce.
How does it work?
Reward Gateway offers employers a customisable, fully employer-branded Holiday Trading module which sits on their employee engagement platform and allows them to run holiday trading windows simply and efficiently.
Holiday Trading enables employees to buy and/or sell annual leave, although employers can choose to allow employees to buy more annual leave than they sell, i.e. by restricting the number of days employees can sell back to the company.
The process for trading holiday days is really simple. If an employee chooses to buy extra days, their salary needs to be adjusted so the employee will pay the cost monthly. The money comes out of their gross pay, resulting in tax savings for the employee and Social Security/National Insurance savings for both the employer and employee. On the other hand, if an employee sells days, the value is added to their gross salary, and tax and Social Security/National Insurance are payable in the usual way.
The number of days that an employee can buy or sell (typically between 5 and 10), along with the cost of 1 day's holiday, is determined by the employer and can be defined individually for each employee. In the UK, for example, holiday days are normally valued at 1/260th of gross basic salary, so if their base salary is £15k, then a holiday day would be valued at roughly £60. Some company policies differ, and our system can, of course, accommodate for this.
As Reward Gateway's Holiday Trading module is seamlessly integrated with the client's employee engagement platform, employees will be able to access their Holiday Trading options easily and without the hassle of additional website addresses or login information to remember.
Availability & Cost
Reward Gateway's Holiday Trading product is available in the UK and IRE.
Pricing can be obtained from any of our Consultants or Client Success Managers, who are always on hand to help. Alternatively, contact us via our form.