Buy additional holiday or take unpaid parental leave

[mrsbeeton999]

I'm not sure if anyone can work out if I'm better booking unpaid parental leave for an extra week in summer hols or buying an extra 5 days holiday which is valued at 1/260th salary per day. My mind is numb and I can't work out which is the better deal?

Unpaid means nil pay.
Buying holiday surely means you lose pay?
So I think I’d go for unpaid? As long as your kids are of school age ( you fall within the conditions of parental leave).

I think it’ll cost you the same (though my maths may be out).
You may be better off buying the holidays though as nobody would question holidays but might ask about parental leave (e.g. when seeking promotion)

I’m struggling to see why it would make a difference from a financial point of view!! Afaik they will both affect your tax/pension/NI etc. And I think the 260 is just the number of working days in a year so should be the same value for both? I am no HR/payroll expert though.

Depends on your budgeting OP. They'll both cost you the same overall, buying the holiday in advance means you can spread the salary reduction over 12 months instead of getting the hit all at once.

It completely depends on how much pay you would lose if you chose to take it as unpaid leave. There may be a policy about this.

It may be that the deduction would get 1/260th of your salary per day in which case it is completely equivalent and they are the same thing.

The 1/260th price is a bit odd. Assuming you have a standard 28 days of leave plus bank holidays there are 225 working days each year.

I wonder if you could "buy" 225 days of additional level at 1/260th of salary per day. A person on £26,000 per year would then have to pay 22,500 to have a whole year off and would be paid £3,500 for doing no work.

If the deduction would be 1/225th of your salary then buying the additional leave @1/260th is a better deal by about 15%

I might be wrong. But surely it's cheaper to take unpaid, as when 'buying' extra time off you are paying work your untaxed full salary for the day, whereas if you take the unpaid leave you will only lose out your taxed income, therefore you lose/'spend' less money by taking unpaid leave

blaaake that's a very good point and op you also separately need to find out whether the amount you buy additional leave for is deducted before or after tax/NI

Thanks everyone it all seems quite complicated! So I'll ask payroll if unpaid is deducted before or after tax.
Orinoco isn't it 1/260 as all leave and bank hols are paid so it counts those days too? I'm not fussed if it's deducted over 12 months or all in 1 month so that's not really a consideration. I only get 25 days leave plus 8 or so bank hols as a newish job so doesn't increase for 3 years.
So if it's deducted before tax it's the same deal but buying hols might reflect better for promotions etc - thank you 😊

Of course bank holidays and basic annual leave is paid, that's normal. The fact remains that in a year where you take no additional time off, you work exactly 228 days. If you buy an additional 10 days leave you work only 218 days. You would lose 10/260ths of your salary (3.85%) and would work 218/228ths as many days (4.39%). Don't knock it - if they are reckoning the cost of a day of work as 1/260th then you are benefitting from this. It's only if the other option uses a different fraction, or if one is deducted before tax and one after, that you need to worry. Don't complain about the 1/260th as this is cheaper than1/228.

Is parental leave limited to x days in 5 years or something?

I'd save that for an emergency family situation, just in case, and buy the holiday.

It's financially the same net position annually but if you take unpaid, it'll hit you in one monrh rather than be smoothed throughout the year. The main difference will be that if you buy extra annual leave you probably have more flexibility in taking it - parental leave had to be taken in full blocks of one week whereas you annual leave policy will dictate how you take it (e.g. usually days here and there are possible). Also parental leave had a total limit e.g. x weeks until your child is 18. You could easily do both if required.