Get in touch
We use cookies on our site to track usage and preferences. Learn more
Back to all news

Calculating Holiday Pay

Posted on 12 Nov 2018 - What's trending?

Theresa Waddingham

You must be paid the same amount when you’re on holiday (annual leave) as you’re paid when you’re at work – whatever your working pattern.

Holiday pay must include overtime, bonus or commission if these usually make up part of your weekly pay. How much pay you get is calculated using the hours you work and how you’re paid for them.

Fixed working hours

If your working hours don’t vary (part time or full time) your pay will be calculated using your usual pay rate.

Shift or rota work

If you work shifts (part time or full time) your holiday pay should be the same as the average number of hours you worked at your average hourly rate in the previous 12 weeks. This shouldn’t include any sick periods.

No fixed hours

If you do casual work with no normal hours, for example on a ‘zero-hours’ contract, your holiday pay will be the average pay you got over the previous 12 weeks. These should be weeks in which you were paid. If you weren’t paid in one of those 12 weeks (because you didn’t work), the last paid week before that should be used to calculate your holiday pay. There’s no automatic right to paid public or bank holidays. An employer can choose to
include these as part of statutory annual leave.

Commission

Holiday pay must include what you would normally get in commission if you were working.

Overtime

All types of overtime you usually work (including voluntary) must be included when calculating holiday pay. If you only work overtime occasionally it doesn’t need to be included.

Rolled-up holiday pay

You must get holiday pay when you take your annual leave. If your employer spreads your holiday pay over the year by adding an amount on top of your hourly rate, it’s known as ‘rolled-up’ holiday pay. Your employer should not use rolled-up holiday pay. You’ll still accrue holiday when you’re on sick leave, maternity leave and parental
leave.

Getting paid for untaken holiday

You can only get paid for holiday you haven’t taken if you’re leaving a job (known as ‘payment in lieu’).
Your employer must pay you for any outstanding statutory holiday when you leave.

Problems with holiday pay

If you think you're not getting as much holiday pay as you’re entitled to you
can raise the issue with your employer.

Expert insight and news straight to your inbox

Subscribe to our newsletter