Holiday Pay Entitlement: What You Are Owed and How to Claim It

Holiday pay is one of the most commonly underpaid rights at work, partly because the rules are more detailed than most people assume. Your holiday pay entitlement is set by the Working Time Regulations 1998, and it covers far more than just the number of days off. It also governs how much each day of leave must be paid, how it is calculated for irregular hours, and what happens to leave you never took when you leave a job.

This guide explains how the 5.6 weeks is built up, what has to be included in a week's holiday pay, the rules for irregular-hours and part-year workers, what you are owed on termination, and how to claim if your employer has underpaid you.

How much holiday am I entitled to?

Almost every worker in England and Wales is entitled to 5.6 weeks of paid annual leave each year. For someone working a standard five-day week, that is 28 days.

The 5.6 weeks is made up of two separate legal layers:

• 4 weeks of "basic" leave under regulation 13, which comes from retained EU law.
• 1.6 weeks of "additional" leave under regulation 13A, which is purely domestic.

This split matters because some technical rules (such as what counts in the pay calculation and how leave carries over) historically applied differently to the two layers.

Two points catch people out. First, bank holidays can count towards your 5.6 weeks - there is no separate statutory right to paid bank holidays on top. Whether you get them off and paid in addition depends on your contract. Second, the statutory entitlement is capped at 28 days, so even if you work six days a week, your legal minimum does not rise above 28 days (though your contract may give more).

How does holiday work for part-time workers?

Part-time workers get the same 5.6 weeks, applied pro-rata to the days they work. The simplest method is to multiply the number of days worked per week by 5.6.

So a worker doing three days a week is entitled to 16.8 days of paid leave a year. Employers can round entitlement up, but never down. If the numbers produce part-days, those fractions are real entitlement and should be honoured or paid out, not quietly dropped.

What counts as a week's holiday pay?

A common employer error is paying holiday at basic salary only, when the worker's normal earnings are higher. The rule is that a week's holiday pay must reflect your normal remuneration, not just contractual basic pay.

That means the following should usually be included when they form part of what you normally earn:

• Regular or compulsory overtime - overtime you work consistently enough that it is part of your normal pattern.
• Results-based commission - so a salesperson's holiday pay should reflect the commission they would normally have earned, not drop to bare salary.
• Regular allowances and shift premiums tied to the way you normally work.

For workers whose pay varies week to week, the calculation uses an average over a 52-week reference period (counting back over weeks in which you were actually paid, ignoring unpaid weeks, going back up to 104 weeks to find 52 paid weeks). The principle, established in case law and now reflected in GOV.UK guidance, is that taking leave should not leave you financially worse off than working.

How does holiday pay work for irregular-hours and part-year workers?

If you work irregular hours (for example on a zero-hours basis) or only part of the year (such as a term-time-only worker), special rules apply for leave years starting on or after 1 April 2024.

For these workers, holiday accrues at 12.07% of the hours worked in each pay period. The figure is not arbitrary: 5.6 weeks of leave is 12.07% of the 46.4 working weeks left in the year once the leave itself is removed (5.6 divided by 46.4 = 0.1207).

A worked example

Suppose an irregular-hours worker does 60 hours in a month. Their accrued holiday for that month is:

60 hours x 12.07% = 7.24 hours of paid leave.

Employers can also use rolled-up holiday pay for these workers, meaning they add a 12.07% uplift on top of pay each period instead of paying at the time leave is taken. For example, on £600 of earnings that month, the rolled-up holiday element would be £600 x 12.07% = £72.42. To be lawful, rolled-up holiday pay must be itemised separately on the payslip, not hidden inside the headline hourly rate.

If you are on a zero-hours contract, your wider rights are covered in our guide to zero-hours contract rights.

What holiday pay am I owed when I leave?

When your employment ends, you are entitled to be paid for any statutory annual leave you have accrued but not taken in the current leave year. This payment in lieu is provided for in regulation 14 of the Working Time Regulations 1998.

A worked example

Take a worker on a five-day week, so a 28-day annual entitlement, whose leave year runs from 1 January. They leave on 30 June - exactly half the year - having taken 5 days of leave.

1. Accrued entitlement to the leaving date: 28 days x (6 months / 12 months) = 14 days.
2. Less days already taken: 14 - 5 = 9 days owed.
3. If their daily pay is £100, the termination payment for untaken leave is 9 x £100 = £900.

This payment is wages, and it is taxable in the normal way. Note that regulation 14 only permits a cash payment for untaken statutory leave on termination - during employment, statutory leave must generally be taken as time off, not bought out. Where notice pay also comes into play on leaving, the rules on notice are covered in our notice periods guide.

Can I carry holiday over to next year?

The general rule is that statutory leave should be taken in the leave year it relates to. Carry-over is limited and depends on the circumstances:

• The 4 weeks of basic leave can generally be carried over where you were unable to take it because of sickness, or because of maternity or other family leave.
• Where an employer fails to give you a genuine opportunity to take your leave, or fails to tell you that untaken leave will be lost, that leave can carry over rather than simply disappear.
• Contractual leave above the statutory minimum is carried over only on whatever terms your contract sets.

If your employer operates a strict "use it or lose it" policy but never actually let you take the leave, the leave may not be lost at all.

What can I do if my holiday pay is unpaid or underpaid?

If your employer refuses your holiday pay, pays you at the wrong rate, or fails to pay accrued leave on termination, you have two main routes:

1. A claim under the Working Time Regulations 1998 for a failure to allow you to take leave or pay you for it.
2. An unlawful deduction from wages claim under the Employment Rights Act 1996, which is the route most often used where holiday pay has simply been underpaid.

The mechanics of an unlawful deduction claim - how a "series" of deductions works, the two-year backstop, and how to calculate what you are owed - are covered in detail in our guide to unpaid wages and unlawful deductions. The short version is that you can usually reach back through a connected series of underpayments, but an award cannot generally recover deductions made more than two years before the claim.

What is the deadline to claim?

The time limit is tight. For an unlawful deduction claim, you have 3 months less 1 day from the date of the last deduction in the series. Miss it, and in practice your claim is almost always barred.

Before you can issue a tribunal claim you must start ACAS Early Conciliation, which pauses the clock while it is in progress. The full mechanics of how the clock runs, pauses and restarts are set out in our employment tribunal deadlines guide, and you can sanity-check a date using the free tribunal deadline calculator.

Key takeaway

Your holiday is worth more than a number of days off: it is paid leave that must reflect what you normally earn, including regular overtime and commission. If your employer has been paying basic salary only, paying nothing for accrued leave when you left, or ignoring the 12.07% rules for irregular hours, you may be owed money. The deadline to claim is short, so if you think you have been underpaid, check the figures and the dates without delay.

This article is legal information, not legal advice. If your holiday pay arrangements are complex - for example variable pay, long-running underpayments, or a disputed leaving date - you may want to consider taking independent legal advice.