Division of Human Resources
Additional Leave Purchase Scheme
Frequently Asked Questions
What is the scheme?
The Additional Leave Purchase Scheme (ALPS) is part of the benefits pack offered by the University
of Leicester, and gives you the option to buy additional annual leave on top of your usual holiday
entitlement, subject to your Head of Department (HoD)/Manager’s approval.
Who can join?
ALPS is open to all University staff meeting the earning criteria set out in the policy, except:
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Those engaged on fixed term/temporary contracts of twelve months or less.
Those engaged on ‘zero or variable hours’ contracts.1
Those engaged via agencies.
Those employed by University subsidiary companies.
How do I apply?
You will need to complete an application form on the HR website. If you do not have access to a
computer, please speak to your Head of Department/Manager, who will be able to obtain a hard
copy for you to complete and return to them to input on your behalf.
When can I apply to purchase additional annual leave?
Requests to purchase additional annual leave can usually be submitted at two points in the year:
 May – the window for applications will be open from 1 May to 31 May;
 November – the window for applications will be open from 1 November to 30 November.
How many additional days can I purchase?
You can purchase up to a maximum of ten additional days of leave per annual leave year (prorata for part-time staff based on FTE) if you apply in the November window, and up to a maximum
of five additional days of leave per annual leave year for applications made in the May window
(also pro-rata for part-time staff based on FTE).
1
Exceptions may be considered on a case by case basis by Heads of Department/Managers in consultation with HR
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Can my application for additional annual leave be declined?
HoDs/Managers can decline your application to purchase additional annual leave for operational
reasons related to your job and/or service needs. If your application is declined, your
HoD/Manager should explain the reasons for this.
Can I appeal a decision to decline my application?
There is no right of appeal against a decision to decline an application.
How do I pay for the additional annual leave purchased?
The purchase of additional annual leave is via a salary sacrifice arrangement. Salary sacrifice is an
agreement between you and the University to vary your terms and conditions of employment,
which will reduce your entitlement to cash pay in return for a non-cash benefit. The non-cash
benefit in this case is additional annual leave. The total cost of annual leave purchased will be
divided by the number of months remaining in the leave year, and deducted from your salary in
equal monthly payments as follows:
 For additional leave purchased in the November window, there will be twelve equal deductions
from monthly pay, from January to December inclusive.
 For additional leave purchased in the May window, there will be six equal deductions from
monthly pay, from July to December inclusive.
How can I calculate the cost of additional annual leave purchased?
The cost of additional annual leave will be based on your total salary (including any contractual
payments/allowances) and on how much tax you pay. As a guide, however, the calculation is
based on the following formula:
(i)
(ii)
(iii)
(iv)
Basic annual salary ÷ 52 = basic weekly pay.
Basic weekly pay ÷ working days in week = daily pay.
Daily pay x number of additional days requested = total amount to be deducted from salary.
Total amount to be deducted from salary ÷ number of months remaining in the leave year (as
previously outlined) = gross monthly deduction from salary.
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Examples:
A.
A full-time member of staff on grade 3, spine point 11, purchasing ten days of additional
leave in the November window:
Basic annual salary = £18,412
Weekly pay = £18,412 ÷ 52 = £354.08
Daily rate = £354.08 ÷ 5 = £70.82
Total cost of the additional ten days of leave purchased = £70.82 x 10 = £708.20
Gross monthly deduction from salary over a twelve-month period = £59.02
B.
A part-time member of staff on grade 8, spine point 39, working twenty hours per week,
purchasing five days of additional annual leave in the May 2017 window:
Basic annual salary = (20 ÷ 37.5) x £41,709 = £22,244.80
Weekly pay = £22,244.80 ÷ 52 = £427.78
Daily rate = £427.78 ÷ 5 = £85.55
Total cost of the additional five days of leave purchased = £85.55 x 5 = £427.75
Gross monthly deduction from salary over a six-month period (July to December inclusive
are six remaining months in the year for this window) = £427.75 ÷ 6 = £71.29
As additional annual leave is not a taxable benefit, there is no income tax or national insurance
payable on the value of the days bought. Therefore, the net cost is reduced by up to 33% for a
basic rate tax payer, and up to 41% for a higher rate tax payer.
NOTE: The above examples assume the members of staff work the same number of hours each
day over five days per week. Where staff work variable hours each day/week, and leave
entitlement is calculated in hours, additional annual leave will be purchased in hours rather than
days. In these circumstances, the hourly rate is used, and multiplied by the number of hours the
staff member wishes to purchase.
What impact will this have on my pension?
If you are in the NHS pension scheme, your pension benefits and contributions will be affected.
You will need to contact the NHS pension administrator for more detail on how this will affect you
personally (see http://www.nhsbsa.nhs.uk/Pensions.aspx).
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Will purchasing additional annual leave affect my benefits?
Your benefits could be affected if your pay is below the lower earnings limit for National Insurance
Contributions. If you believe that your benefits may be affected, you should ensure that you seek
advice from the appropriate benefits agency prior to making an application.
Will purchasing additional annual leave affect my entitlement to Child Tax Credits (CTC) or
Working Tax Credits (WTC)?
CTC/WTC payments are based on your income for the previous tax year, which ends on 5 April
each year. If you are purchasing additional annual leave and are making a new claim for CTC or
WTC, you will need to use your revised pay figure when applying. Help and advice is available
from the Tax Credits helpline on 0345 300 3900, or via their website (see www.hmrc.gov.uk).
What happens if I reduce my hours or have a pay increase/decrease?
The holiday calculation is based on your pay at the time that you make your application to buy
additional annual leave, and deductions will continue to be made as agreed at that time. The
annual leave will be recalculated, including the additional purchased leave.
What happens if I go on maternity leave or sick leave?
If you enter a period of unpaid leave, you will be allowed to suspend salary sacrifice payments
until your return to work. If you decide not to return to work, any outstanding payment for
additional annual leave purchased (and taken) will be deducted from your final salary payment –
alternatively, you can opt to pay off the remaining months in full via your salary before going on
maternity leave.
You should also be aware that SMP and SSP will be calculated on your reduced gross salary, which
may result in a lower value of these benefits.
What happens if I have purchased additional annual leave and I leave the University part way
through the leave year?
You will be expected to use any additional annual leave purchased before you leave the University
as reimbursement for untaken additional annual leave will not normally be made. All remaining
deductions for additional annual leave purchased will be made from your final salary.
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Can I carry forward untaken additional leave purchased into the following leave year?
You will not be permitted to carry forward additional leave purchased into the next leave year
unless there are exceptional circumstances that prevent the leave being taken in the current leave
year. It is assumed, therefore, that additional leave purchased is used before normal contractual
annual leave entitlement. Existing carry forward rules will apply to contractual annual leave.
Can I change my mind once the additional annual leave has been approved?
Once the agreement has been made and monthly deductions have commenced, it becomes a
binding agreement between yourself and the University, and cannot be reversed unless there are
exceptional circumstances. The circumstances referred to are significant life changes, which
might include marriage, divorce, severe illness of either the member of staff or their partner,
having to reduce hours of work or pay, or the potential job loss of either the member of staff or
their partner.
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