UK Holiday Pay Calculator — 2026
Work out what your employer owes you for unused holiday when you leave.
Calculate holiday pay on termination using Working Time Regulations 1998 and the 2020 reference-period rules. Enter salary, leave used, and notice period; we compute accrued holiday, the gross payout, and what’s left after income tax and employee National Insurance.
Estimates only. Contractual holiday arrangements can exceed statutory. Check your contract and contact ACAS if a dispute arises.
How holiday pay is calculated on termination
The calculation
On termination, your employer must pay you for accrued but untaken statutory holiday. The formula is simple but the inputs need care:
- Accrued holiday (days) = Annual entitlement × (Days worked in current leave year ÷ 365)
- Unused holiday (days) = Accrued − Days already taken
- Daily rate = Average weekly pay ÷ Working days per week
- Payout = Unused days × Daily rate
Average weekly pay (52-week reference period)
Since April 2020, “a week’s pay” for holiday calculations uses the average of the last 52 paid weeks, not 12. Weeks with no pay are skipped; the employer can look back up to 104 weeks to find 52 paid weeks. For salaried staff with steady pay, this is just salary ÷ 52. For variable pay (commission, overtime, shift premiums), the 52-week average can differ materially from basic salary.
Worked example
Full-time salary £35,000 (gross weekly £673). Working 5 days/week = £134.60/day. Left the company 6 months into the leave year with 28 days/year entitlement, having taken 10 days. Accrued: 28 × 6/12 = 14 days. Unused: 14 − 10 = 4 days. Payout: 4 × £134.60 = £538.40 gross. After basic-rate tax (20%) and NI (8%): roughly £387 net.
UK holiday entitlement rules — 5.6 weeks and the 12.07% accrual
The 5.6 weeks statutory minimum
Under the Working Time Regulations 1998, all workers are entitled to a minimum of 5.6 weeks of paid annual leave per year. For a 5-day-a-week worker, that’s 28 days (can include the 8 UK bank holidays). For part-time workers, pro-rata: a 3-day-a-week worker gets 16.8 days (5.6 × 3).
Bank holidays
Employers can choose whether bank holidays are part of the 5.6 weeks or additional. If included, you have 28 days total; if additional, you get 28 + 8 = 36 days. Check your contract — the default under WTR is “counting towards”, but many employers grant them on top as a perk.
Irregular hours / part-year workers (from April 2024)
For workers on zero-hours, term-time, or genuinely irregular contracts, holiday accrues at 12.07% of hours worked in each pay period (12.07% is 5.6 weeks as a proportion of 46.4 working weeks). Rolled-up holiday pay is also legal again — employers can pay an extra 12.07% on top of each payment instead of paying during leave.
Carry over
Statutory 4 weeks (EU-derived) generally can’t be carried over unless you were sick or on maternity. The additional 1.6 weeks (UK-only) can be carried by agreement. On termination, all accrued-but-untaken leave must be paid out regardless of carry-over status.
How holiday pay on termination is taxed in the UK
Income tax via PAYE
Holiday pay on termination is treated as ordinary earnings — subject to income tax at your marginal rate. 2026-27 bands (rUK): Personal Allowance £12,570, basic rate 20% up to £50,270, higher rate 40% to £125,140, additional rate 45% above.
Employee National Insurance
Class 1 NI applies at 8% on earnings between £12,570 and £50,270, and 2% above. Holiday pay counts towards the NI threshold as part of your final pay period.
Termination payments over £30,000
Holiday pay is NOT part of the £30,000 termination exemption — it’s earned pay, fully taxable. The £30,000 exemption applies only to genuine termination payments (redundancy, ex gratia severance). Payments in lieu of notice (PILON) have been fully taxable since April 2018 under the PENP rules.
Student loan
Student loan deductions apply to holiday pay at your usual plan rate (Plan 1: 9% over £24,990, Plan 2: 9% over £27,295, Plan 4 Scotland: 9% over £31,395, Plan 5: 9% over £25,000).
Pension contribution
If you’re auto-enrolled, the holiday pay element generally carries your usual contribution through payroll (typically 5% employee, 3% employer minimum).
How UK holiday pay uses a 52-week reference average
The April 2020 reform
Since 6 April 2020, holiday pay for workers without fixed hours is calculated on a 52-week reference period (raised from 12 weeks). Weeks where the worker received no pay are excluded, so the 52 paid weeks may span more than a year of calendar time. Maximum look-back is 104 weeks (2 years).
Why this matters for termination pay
For workers with variable shifts, overtime, or commission, the 52-week average usually generates higher holiday pay than the basic-rate alone. Regular non-guaranteed overtime, contractual commission, and shift premiums must all be included.
Worked example — variable hours
Sarah, retail worker, worked 50 paid weeks in the year before resignation. Average weekly pay across those weeks (basic + commission + Sunday premiums) was £540. She has 14 days of holiday accrued but not taken. Daily rate = £540 ÷ 5 = £108. Holiday pay owed = £108 × 14 = £1,512.
Bank holidays in the calculation
Bank holidays count as part of the 5.6 weeks statutory holiday minimum unless your contract treats them separately. Most UK contracts now express holiday as "20 days plus bank holidays" — combining for a total of 28 days that equates to 5.6 weeks.
Which pay components are included in UK holiday pay calculations
Must be included (post-2014 CJEU rulings)
- Regular non-guaranteed overtime — overtime worked sufficiently regularly that it forms part of "normal pay"
- Compulsory overtime — overtime the worker is contractually required to do
- Contractual commission — commission paid as part of normal remuneration (Lock v British Gas, 2014)
- Performance bonuses — if regular and intrinsically linked to performance of contractual duties
- Shift premiums — night shift, weekend, on-call payments
- Travel allowances — where exceeding actual expenses (i.e. compensating for time)
Excluded
- Genuinely voluntary overtime — only if not regular and the worker is free to refuse
- Expense reimbursement — at-cost reimbursement for travel, meals, etc.
- Discretionary bonuses — paid at employer's discretion, not contractually owed
Different rules for 4 vs 5.6 weeks
Historically, the EU Working Time Directive's 4 weeks must include all pay components above. The additional UK 1.6 weeks could be paid at "basic rate" only. After the Retained EU Law (Revocation and Reform) Act 2023 reforms in 2024, this distinction is being formally codified — the additional 1.6 weeks can legitimately be paid at lower rates for new leave years.
UK statutory holiday entitlement explained
The 5.6 weeks rule
Every UK worker is entitled to 5.6 weeks of paid annual leave per year (including bank holidays). For a 5-day-a-week worker, this is 28 days; for a 4-day worker, 22.4 days; pro-rata for part-time. Cap is 28 days maximum even if working 6 days/week.
Bank holidays — included or extra?
Statutory 5.6 weeks can include bank holidays — they are not legally separate. Common UK contract patterns: "20 days + bank holidays" (most common), "28 days inclusive of bank holidays" (some retail/hospitality), or "33 days inclusive" (generous public sector). All three are legal as long as the total meets or exceeds 5.6 weeks.
Accrual during the first year
In the first year of employment, holiday accrues at 1/12th of the annual entitlement each month, rounded to the nearest half day. After year 1, employees typically get the full annual allowance from the start of each leave year.
Carrying holiday forward
The EU 4 weeks cannot generally be carried into the next leave year. The UK additional 1.6 weeks can be carried with employer agreement. Holiday accrued during sickness or maternity leave that couldn't be taken can be carried forward for up to 18 months.
How notice periods interact with UK holiday pay on termination
Holiday accrued during notice
You continue to accrue holiday during your notice period. If you serve 4 weeks notice, you accrue ~1.9 days of holiday (assuming 5.6 weeks/year), which must be paid out at termination if not taken.
Employer requiring you to take holiday during notice
An employer can require you to use accrued holiday during notice, but must give you notice equal to twice the holiday length. To require 5 days of holiday, the employer must give you 10 days' notice that they are forcing leave.
Garden leave
During garden leave (where you remain employed but don't work), you continue to accrue holiday and the employer can require you to take holiday during this period. Garden leave is often used to prevent you joining a competitor while keeping you on the payroll.
Pay In Lieu of Notice (PILON)
If your contract has a PILON clause and the employer pays you instead of working your notice, holiday accrual during the would-be notice period is NOT required — you only get paid for accrued holiday up to the actual termination date. Without a PILON clause, dismissal without notice could be a wrongful dismissal claim.
Resignation vs dismissal
Holiday pay on termination is owed regardless of who initiated the termination — resignation, redundancy, dismissal (fair or unfair), or mutual agreement. The only exception is gross misconduct dismissal, where the contract permits summary termination without notice but holiday pay still accrues to the termination date.
Tax and NI treatment of UK holiday pay on termination
Holiday pay is ordinary earnings
Holiday pay paid at termination is treated identically to wages — taxed at marginal rate through PAYE, with employee National Insurance at 8% on standard band income and 2% above. Employer NI of 13.8% applies on top from the employer's perspective.
Not part of the £30,000 exemption
The £30,000 tax-free termination payment exemption applies only to genuinely ex-gratia (non-contractual) payments and statutory redundancy. Holiday pay, contractual notice pay, and any contractually owed amounts are fully taxable from the first £1.
Worked example
UK higher-rate taxpayer (40% income tax, 2% NI) receives £3,000 holiday pay at termination. Total deductions: £1,260 (£1,200 income tax + £60 NI) = 42%. Net received: £1,740.
Combining with redundancy
If you receive £20,000 statutory redundancy + £3,000 holiday pay + £5,000 ex-gratia: redundancy and ex-gratia (total £25,000) are within the £30,000 exemption (tax-free). Holiday pay £3,000 is fully taxable. Your tax position depends on whether the payments push you into higher rate bands in the tax year of receipt.
Tax year timing
If you're terminating near the end of a tax year, ask if the payment can be made in the new tax year — this can shift you down a tax band or unlock the personal allowance.
Common disputes over UK holiday pay on termination
Employer says holiday "expired"
Statutory 4 weeks of holiday cannot be lost without compensation — even if your contract says it's "use it or lose it." Worker entitlement to be paid for untaken statutory holiday on termination is protected and unaffected by contract clauses.
Pay calculated at basic rate only
If your job involves regular overtime, commission, or shift premiums, holiday pay at basic rate only may be unlawful underpayment. Calculate the 52-week reference average yourself and challenge with HR if there's a material difference.
"Rolled up" holiday pay (irregular hours)
For irregular-hours and part-year workers, employers can pay 12.07% as a separate line on each payslip (rolled-up holiday pay). If you weren't paid this way and have accrued holiday at termination, you're owed the full balance.
Disputed bank holiday treatment
Whether bank holidays are counted as part of your statutory leave or separately is governed by your contract. Disputes often arise when contracts say "20 days plus bank holidays" but then dock leave for bank holidays. Read the precise wording — if ambiguous, courts generally favour the employee.
Filing a claim
Employment Tribunal claims for unpaid holiday pay must be filed within 3 months minus 1 day of the termination date. First step is ACAS Early Conciliation (free), which extends the deadline by up to 1 month if not resolved.
❓ Frequently askedFrequently asked questions about UK holiday pay on termination
How much holiday pay am I entitled to on leaving?
All accrued but untaken statutory holiday must be paid out. Statutory min is 5.6 weeks/year. Pro-rata: 5.6 weeks × months worked ÷ 12, minus days already taken. Calculated at your average weekly pay over the last 52 paid weeks.
Can my employer force me to take holiday during notice?
Yes — an employer can require you to use accrued holiday during notice, but must give you twice the length of holiday as notice (so 5 days’ holiday = 10 days’ notice to take it).
Is holiday pay on termination taxed?
Yes, fully — as ordinary earnings through PAYE. Income tax at marginal rate plus employee NI (8% standard band, 2% above). Not included in the £30,000 termination payment exemption.
What about contractual holiday above 28 days?
Untaken contractual holiday must be paid out the same as statutory unless your contract says otherwise. Some contracts do specify “only statutory 28 days paid out” — check yours. If unspecified, all accrued contractual holiday is payable.
I’m irregular hours — how does this work for me?
From April 2024, irregular-hours and part-year workers accrue at 12.07% of hours worked each pay period. On leaving, the same 12.07% rule applies to any as-yet-unpaid accrued holiday. Your employer may have been paying you 12.07% “rolled up” on each paycheque — if so, you’ve already been paid and there’s nothing further on termination.
What if my employer refuses to pay?
Raise a grievance first. If unresolved, contact ACAS for Early Conciliation (free). You have 3 months minus 1 day from the termination date to file an Employment Tribunal claim for unlawful deduction from wages — strict deadline.
Are commission and overtime included in holiday pay?
Regular commission must be included (Lock v British Gas, 2014). Regular non-guaranteed overtime must be included (Williams & Bear Scotland cases). Performance bonuses tied to contractual duties must be included. Genuinely voluntary, irregular overtime may be excluded.
What is the 12.07% rule?
For irregular-hours and part-year workers, holiday accrues at 12.07% of hours worked in each pay period (5.6 weeks ÷ 46.4 working weeks per year). This applies to zero-hours contracts, term-time-only workers, and seasonal staff. Employers may pay this as "rolled-up" holiday pay on each payslip.
Can my employer pay me holiday pay during the year instead of giving leave?
Generally no — except for irregular-hours/part-year workers under the rolled-up holiday pay scheme. For regular workers, the WTR 1998 prohibits "paying in lieu" of statutory holiday during employment. The only time payment can substitute for actual leave is at termination.
How does maternity leave affect holiday accrual?
You continue to accrue full statutory and contractual holiday during maternity leave. If you can't take it before the leave year ends, you can carry it forward for up to 18 months. Refusing to allow such carry-over has been ruled unlawful by the CJEU and UK courts.
What happens to holiday pay if I'm dismissed for gross misconduct?
You still receive pay for accrued but untaken holiday up to the termination date. The summary dismissal removes your right to notice pay but NOT your right to holiday pay — these are separate entitlements under different legislation.
Can I get a tax-free transfer of holiday pay to my pension?
Some employers offer Salary Sacrifice arrangements where final-pay components (including holiday pay) can be redirected into a workplace pension at the time of termination, saving income tax and NI. Subject to the £60,000 annual allowance and your contract terms — not a universal option.