UK holiday pay is usually based on a week's pay for each week of leave. Fixed-hours workers normally receive their usual pay. Variable-pay, irregular-hours and part-year workers usually need a 52 paid-week average. Normal pay can include regular overtime, commission, bonuses and shift premiums.
Need the number first?
Use the standalone holiday pay calculator for 52-week reference-period calculations, or the rolled-up holiday pay calculator for eligible irregular-hours and part-year workers paid each pay period. This guide explains the rules behind both approaches.
Open the holiday pay calculator1. Holiday entitlement vs holiday pay
There are two separate questions employers need to answer:
If you need the entitlement side first, start with our Annual Leave Entitlement UK guide or the annual leave entitlement calculator. This page focuses on the pay side.
2. The core holiday pay rule
The core legal principle is simple: holiday pay should put the worker in the financial position they would normally have been in if they had been working. Acas explains this in plain English: when a worker takes holiday, they should get the same pay when they are on holiday as when they are at work.
For someone on fixed hours and fixed pay, that is usually straightforward. For someone whose pay varies because of overtime, commission, bonuses, shift premiums, casual hours or part-year work, it becomes a reference-period calculation.
Do not treat holiday pay as basic pay by default. Basic pay may be right for some workers, but if regular overtime, commission, contractual task payments or shift premiums are part of normal earnings, excluding them can underpay holiday.
3. Working patterns and pay methods
The right calculation depends on how the worker works and how they are paid. This is the employer's first decision point.
| Worker type | Typical holiday pay method | Watch out for |
|---|---|---|
| Fixed hours, fixed pay | Usual pay for the period of holiday | Regular allowances, shift premiums or contractual payments may still matter |
| Fixed hours, variable pay | Usual hours, but average variable pay elements may need including | Commission, overtime and bonuses that are regularly paid |
| Shift workers | Average pay based on regular shift pattern and premium rates | Night, weekend and unsocial-hours premiums |
| Irregular-hours workers | 52 paid-week average, or rolled-up holiday pay if allowed and chosen | Leave years beginning on or after 1 April 2024 have specific rules |
| Part-year workers | 52 paid-week average, or rolled-up holiday pay if allowed and chosen | Weeks with no pay are not counted in the holiday pay average |
If the worker's hours have changed during the year, you may also need to recalculate entitlement from the change date. Our guide to part-time holiday entitlement explains the entitlement side of that problem.
4. The 52-week reference period
The 52-week reference period is the main method for calculating holiday pay where pay varies. The employer looks back from the last complete working week before the holiday starts, counts paid weeks and averages them.
Start with the last complete paid week before the holiday starts. A week usually runs Sunday to Saturday unless pay is calculated using a different weekly cycle.
Count backwards to collect up to 52 paid weeks. Weeks with no pay are ignored for this holiday pay calculation.
Do not go back more than 104 weeks. If there are fewer than 52 paid weeks in that window, use the paid weeks you have.
Divide total pay by the number of paid weeks counted. That gives the week's holiday pay rate.
Worked examples
A worker is paid £550 every week and has no regular variable elements.
Total pay across the previous 52 paid weeks is £41,600, including regular commission.
The worker has 48 paid weeks in the last 52, so the employer looks further back to reach 52 paid weeks. Total pay is £18,720.
The worker has only 40 paid weeks in the permitted look-back period. Total pay is £12,000.
The same principle appears in practical leaver calculations. If the worker is leaving and you need the final cash figure, use the leaver holiday pay calculator and read our guide to unused annual leave when an employee leaves.
5. What normal pay must include
Normal pay is not just basic salary. For at least 4 weeks of statutory leave, holiday pay must include certain payments that the worker normally receives. Acas lists payments linked to contractual tasks, payments linked to professional or personal status, and regular payments such as overtime where they have been paid during the last year.
| Pay element | Usually include? | Practical employer note |
|---|---|---|
| Basic salary or hourly pay | Yes | This is always the starting point. |
| Commission | Yes, if linked to contractual work | Sales staff are the obvious risk area. |
| Regular overtime | Yes, if regularly paid | Do not ignore overtime simply because it is not guaranteed. |
| Shift premiums | Often yes | Night, weekend and unsocial-hours pay may reflect what the worker normally earns. |
| Seniority or qualification allowances | Yes, where linked to status | Acas specifically refers to professional or personal status payments. |
| One-off discretionary bonus | Not always | Whether bonuses count depends on their nature and whether they form normal remuneration. |
The danger is underpayment by habit. Many employers still pay holiday at basic salary because that is administratively easy. That can be wrong if the worker regularly earns more than basic pay.
6. The 4 weeks vs 1.6 weeks split
The statutory 5.6 weeks is made up of two parts. The first 4 weeks are the core Working Time Regulations leave. For regular full-year workers, these 4 weeks must be paid at the worker's normal rate of pay. The additional 1.6 weeks can be paid at basic rate.
| Leave pot | Pay rate | Employer choice |
|---|---|---|
| First 4 weeks | Normal pay | Must include normal remuneration such as regular overtime and commission where relevant |
| Additional 1.6 weeks | Basic pay can be used | Many employers pay all 5.6 weeks at normal pay for simplicity and consistency |
If you choose to split the rates, explain it clearly in contracts or your holiday policy. If you do not want the administration, paying all statutory holiday at the normal rate is usually simpler and safer. Our company leave policy guide explains how to put calculation rules into policy wording.
7. Irregular-hours and part-year workers
For leave years beginning on or after 1 April 2024, irregular-hours and part-year workers have a specific statutory framework. Their holiday entitlement builds up at 12.07% of hours worked in a pay period, based on the statutory 5.6 weeks. Holiday pay can then be handled through either the 52-week reference period route or, where allowed and properly implemented, rolled-up holiday pay.
This matters for hospitality, care, cleaning, events, schools, nurseries, seasonal businesses and any employer using variable-hours staff. It also links closely to our guides on holiday entitlement on zero-hours contracts, holiday pay for irregular-hours workers and holiday entitlement for term-time workers.
Do not mix up accrual and pay. For irregular-hours workers, 12.07% is used to build up holiday entitlement. Holiday pay is a separate question unless you are using rolled-up holiday pay correctly.
8. Rolled-up holiday pay
Rolled-up holiday pay means the employer adds holiday pay to the worker's normal pay each pay period, instead of paying holiday pay when the worker actually takes holiday. Since the 2024 reforms, it can be used for irregular-hours workers and part-year workers only, for leave years beginning on or after 1 April 2024.
Example: if an irregular-hours worker earns £1,000 in a monthly pay period, rolled-up holiday pay at 12.07% is £120.70. The payslip should show the ordinary pay and the rolled-up holiday pay separately.
Rolled-up pay does not remove the need for holiday to be taken. Employers still need to make sure workers can take their statutory holiday. The risk is that workers see holiday pay in each payslip and then feel financially discouraged from actually taking time off.
9. Holiday pay when someone leaves
When someone leaves, holiday pay becomes a final pay calculation. The employer needs to work out:
Accrued entitlement up to the leaving date. This is the entitlement calculation.
Holiday already taken. Approved records matter here.
Unused or overtaken holiday. Unused holiday is usually paid in lieu. Overtaken holiday may only be deducted if the contract allows it.
The correct pay rate. For variable-pay workers, that may require the 52-week reference period.
For the full leaver process, use the leaver holiday pay calculator and the guide to calculating holiday entitlement for a leaver.
10. Common employer mistakes
| Mistake | Why it matters | Better approach |
|---|---|---|
| Using basic pay for everyone | It can underpay workers with regular overtime, commission or premiums | Identify which pay elements form normal remuneration |
| Averaging the wrong weeks | Weeks with no pay should not be counted in the 52-week average | Count paid weeks and look back only as far as the rules allow |
| Using rolled-up pay for the wrong workers | Rolled-up holiday pay is only available for irregular-hours and part-year workers | Check worker classification before changing pay method |
| Failing to show rolled-up pay separately | The rules require it to appear as a separate payslip payment | Add a clear payslip line for rolled-up holiday pay |
| Weak leave records | Payroll cannot calculate final holiday pay accurately without clean usage records | Keep balances, approvals, carried-over leave and final-pay data in one system |
11. Holiday pay records
Holiday pay is only as reliable as the records behind it. Employers should be able to show how leave entitlement, leave taken, carried-over leave and holiday pay were worked out. Acas guidance now says that from 6 April 2026, employers must keep annual leave and holiday pay records for at least 6 years from the date they were made.
In practical terms, keep:
- annual leave allowance for each worker
- holiday requested, approved, declined and cancelled
- holiday taken and remaining
- carried-over holiday and the reason for carry-over
- weekly pay data used for holiday pay reference-period calculations
- rolled-up holiday pay lines where used
- final pay calculations for leavers
If your team still uses spreadsheets, this is exactly where things start to go wrong. The guide to managing staff holidays without spreadsheets explains the operational risk in more detail.
Related holiday pay guides and tools
Sources
Every legal rule and calculation method in this guide is based on official UK sources, Acas guidance or legislation. Competitor HR blogs are not used as sources.
| Source | What it covers |
|---|---|
| Acas · Calculating holiday pay | Holiday pay should match pay at work, fixed-hours rules, variable-pay elements and tribunal time limits |
| GOV.UK · Holiday pay and entitlement reforms | 2024 reforms, 4 weeks vs 1.6 weeks, normal pay, rolled-up pay and 52-week reference period |
| Acas · Irregular-hours and part-year workers | 12.07% accrual, rounding and annual leave records from 6 April 2026 |
| Acas · Rolled-up holiday pay | Eligibility, 12.07% pay calculation, separate payslip line and sick/statutory leave treatment |
| Working Time Regulations 1998 · regulation 16 | Statutory right to payment for annual leave |
| Working Time Regulations 1998 · regulation 16A | Rolled-up holiday pay framework for applicable workers |
| Employment Rights Act 1996 · a week's pay | Statutory structure for calculating a week's pay |
Frequently asked questions
Holiday pay is based on a week's pay for each week of statutory holiday. Fixed-hours workers usually receive their normal pay. Workers with variable pay, irregular hours or part-year patterns usually need an average based on the previous 52 paid weeks, excluding unpaid weeks where necessary.
Holiday pay must include payments that form part of normal remuneration for at least 4 weeks of statutory leave. This can include commission, regular overtime, shift premiums, bonuses linked to contractual work, and payments linked to professional or personal status such as seniority or qualifications.
The 52-week reference period is the look-back period used to calculate average holiday pay for workers with variable pay, irregular hours or part-year work. Employers count back to find up to 52 paid weeks, ignoring weeks with no pay and going back no more than 104 weeks.
Rolled-up holiday pay can be used for irregular-hours workers and part-year workers for leave years beginning on or after 1 April 2024. It must be calculated at at least 12.07% of total pay in the pay period, paid at the same time as normal pay, and shown separately on the payslip.
Not always. For regular full-year workers, 4 weeks of statutory leave must be paid at normal pay, which can include regular overtime, commission and similar payments. The additional 1.6 weeks can be paid at basic pay, although many employers choose to pay all 5.6 weeks at the normal rate for simplicity.
Employers should keep clear records of annual leave taken, holiday pay calculations, carried-over holiday and the data used for reference-period calculations. From 6 April 2026, Acas says employers must keep annual leave and holiday pay records for at least 6 years from the date they were made.