You can see below how the holiday cost works depending on how the employee is paid.

Their wage cost forecast does not reduce when they take holiday. Their salary already includes holiday pay, so the forecast stays the same even if they’re off.

It’s different. They build up holiday based on the hours they work on the rota. When they take paid holiday, that time is included in the wage cost, so it doesn’t reduce the forecast either.

So, in both cases, the wage cost forecast doesn’t go down when someone takes holiday, it just works differently depending on their pay type.