Holiday entitlement and pay

Who is entitled

All workers are entitled to statutory holiday from their first day. This includes employees, part-time workers, agency workers, casual workers, workers on zero-hours contracts, and workers with irregular hours.

Genuinely self-employed people, genuine volunteers, and members of the armed forces are not entitled. If a tribunal determines someone is a worker rather than genuinely self-employed, they are entitled to holiday pay regardless of how the contract describes them.

Workers continue to accrue holiday during maternity leave, paternity leave, adoption leave, shared parental leave, parental bereavement leave, and sick leave.

The two-pot system

The 5.6-week entitlement is split into two pots with different rules for pay and carry-over:

• Regulation 13 leave (4 weeks): must be paid at the worker's 'normal' rate, which includes regular overtime, commission, and regular allowances. Generally cannot be carried over.
• Regulation 13A leave (1.6 weeks): can be paid at basic rate only (excluding overtime, commission, bonuses). Can be carried over with employer agreement.

For irregular hours and part-year workers (from April 2024), all statutory leave must be paid at the normal rate — the two-pot distinction does not apply.

Calculating entitlement

Full-time workers (5 days per week): 5.6 × 5 = 28 days. This is also the statutory maximum cap.

Part-time workers (regular hours): multiply days worked per week by 5.6. For example, 3 days per week = 16.8 days per year.

Irregular hours and part-year workers (from April 2024): holiday accrues at 12.07% of hours worked in each pay period. This follows the Employment Rights (Amendment) Regulations 2023, which effectively reversed the Supreme Court ruling in Harpur Trust v Brazel [2022] that had required full 5.6-week entitlement regardless of working pattern.

Calculating holiday pay

For workers with variable pay, holiday pay is based on average weekly earnings over the previous 52 weeks in which pay was received (increased from 12 weeks on 6 April 2020). Employers can look back up to 104 weeks to find 52 paid weeks.

Include in the calculation:

• Basic pay
• Regular overtime (if regularly worked)
• Regular commission
• Regular bonuses and allowances

Exclude expense reimbursements and one-off bonuses.

Rolled-up holiday pay

From leave years starting on or after 1 April 2024, employers can use rolled-up holiday pay for irregular hours and part-year workers only. This means adding a 12.07% uplift to every payment rather than paying separately when holiday is taken.

Key requirements:

• Must be shown as a separate line item on the payslip
• The worker still has the right to take time off
• Not permitted for workers with regular, fixed hours

Carry-over rules

• Standard: up to 8 days (1.6 weeks of Regulation 13A leave) can be carried over with employer agreement
• Sickness: workers who cannot take leave due to sickness can carry over up to 20 days into the following leave year
• Family leave: workers can carry over their whole entitlement if they could not take it because of maternity, paternity, adoption, shared parental, or parental bereavement leave
• Employer prevented leave: if the employer failed to facilitate leave-taking or warn that untaken leave would be lost, the whole entitlement carries forward

Holiday during notice and on termination

An employer can require a worker to take remaining holiday during their notice period, provided correct notice is given. On termination, you must pay for all accrued but untaken statutory holiday — even if the worker is dismissed for gross misconduct.

If a worker has taken more holiday than they have accrued, you can only deduct the excess from final pay if you have a contractual right to do so or the worker has agreed in writing.

Enforcement

Holiday pay claims are brought as unlawful deduction from wages claims at an employment tribunal. The time limit is 3 months minus 1 day from the date of the underpayment. ACAS early conciliation is a mandatory first step.

For a series of underpayments, the tribunal can consider the whole series with a 2-year backstop limiting how far back claims can go.