Financial implications of the Act
The estimated cost to the Exchequer of 2 weeks’ leave paid at the statutory flat rate (currently £140.98 a week) or 90% of average weekly earnings where that is lower, is £1.77m per year. In addition, there will be a one-off cost estimated at £1.25m to amend HM Revenue & Customs’ systems so that employers can reclaim a percentage of the statutory pay. They do this by reducing their National Insurance payments to HM Revenue & Customs.
	The one off cost to business of familiarising themselves with the new legislation, and for example to amend their HR policies, is estimated at £4.8m. The annual cost to business resulting from greater staff absence, and in some cases a contribution towards the statutory pay, is estimated at £1.45m.