Buying extra annual leave

[Scarlettjade]

Work have brought in a new policy, allowing staff to buy up to 5 additional annual leave days per year.

We currently get 28 days + bank holidays.

28 days is usually plenty enough annual leave, but I’m thinking that most people would jump at the chance of getting more time off work for only a small reduction in pay (buying 5 days would result in a 2% reduction on my annual gross salary).

Just keen to hear what others would choose to do?

This is a very important point!

I worked at the same company over 20 years. I never took time off sick, never conjured up all day doctors appointments, and never had endless childcare issues (which seems to be the new "bad back" excuse post-covid). More importantly, any extra leave I took I bought via the salary sacrifice scheme.

So when I got the tap on the shoulder last year I thought what was the bloody point. If I wanted the extra days off why didn't I just play hooky like the rest? It took me ages to rub off the word mug that was written on my forehead.

I work in a role where no one covers my work when I’m off, so the point about it being same work for less pay is an interesting one that I hadn’t thought of.

I’m going to buy the 5 days this year and see how it goes, I’ll re-evaluate next year.

I can only buy 3 extra days which brings me to 29 plus BH.
I would buy more if I could.

When I could, I did.

I now have more annual leave as standard and the ability to accrue up to 13 days a year in flexitime.

Am I the only person that didn't know that this was a thing? I've never worked anywhere that has offered this.

The 2nd year my work did this was 2020. Everyone purchased extra holiday and no one wanted to take it, but was stuck with it.

I struggle to fit in my 30days + bank holidays with how busy work can be so only buy if I have extra going on that year. For example the year I got married as we got married abroad I purchased the extra week so I could still take my usual annual leave also.

I buy a week - it makes such a difference but I don’t notice the difference in money as a higher rate tax payer due to it being administered as a salary sacrifice arrangement.

Yes but it comes off your gross salary so you save the tax and ni you would have paid. Also I buy days and my employee spreads the deduction over the whole year so it’s a smaller deduction wechseln month rather than with unpaid leave it all comes off when you take

I buy the extra week. It comes off evenly over the year and I don’t notice it

We can buy 10 days and I always do. Sometimes I don’t use all of it and it’s repaid at the end of the holiday year. Am looking for a new job and this is something I will be looking for!

I did it for tax savings - it worked out VERY cheap for me to do so because I was in a 60% tax trap plus student loan. It was an effective tax of 77% I think. I would always buy in this scenario.

My former employers offered this and it was a godsend for parents with childcare worries. We could buy up to 10 days - the only stipulation was that you had to use within the business' holiday year or lose it!! I loved it just for the extra holiday time we could have and we never really noticed the difference in the pay.

What do people mean when they say they sell it?

Introduced at my workplace with a deadline to apply each year (so you have to opt before the leave year starts). Not something I have chosen, some have done so.

I buy 5 days a year.
Doesn’t decrease my tax bill though, as it comes off after my deductions (so it isn’t salary sacrifice like my pension contributions).

I wish I could pay extra leave. I get 20 days plus bank holidays. I can take it unpaid which I suppose is the same but I would jump at the chance for sure

They've just introduced it at my place as a way of generating income and supposedly addressing issues around work life balance.
However, people on my contract already get 37 days plus bank holidays and Christmas so I can't see many people taking them up on the offer.

Those on a different contract get fewer days so there might be some interest there I suppose but I don't think it's been greeted with the enthusiasm they expected!

That they take less leave and get paid more.

Yes but it comes off your gross salary so you save the tax and ni you would have paid

But you're not 'saving' the tax and NI...whilst you won't be charged it on the days you buy, the purchase cost will be your gross pay for that day. So in practice it's just unpaid leave.

I always buy the maximum allowed.

They sell it back to the company.

So if you have 25 days leave, you sell 3 so can only take 22 days off but you get paid for the 3 extra days you work.

I don't buy it because I can never work out how I'd fit in 7 weeks leave due to my own poor planning but I know for people with primary aged children it is really helpful

It’s not that straight forward if you’re in a higher tax band. Someone earning £120,000 will be paying 20% on their first £1 earnt and 60% tax on their last £1 earnt. There’s a big difference in tax paid on your salary in the first week of the year and the last week of the year if you’re in that particular situation, so buying annual leave has much less impact on take home pay.

Similar impact at c £50,000 before the recent child benefit changes.

I've never heard of this - out of interest, how to you buy it? Is there a set rate per day?!

Yes but the week off is more valuable in and of itself than the weeks pay for most people