When an employee leaves, they must be paid in lieu of accrued but untaken statutory holiday. Accrued holiday is the annual allowance multiplied by the proportion of the leave year worked, minus holiday already taken. The result is paid at their normal daily rate.
How this calculator works
When someone leaves a job in the UK, the employer must pay them for any statutory holiday they have built up but not used. This is the only time statutory holiday can lawfully be paid instead of taken, and it applies whether the person resigns, is made redundant, or is dismissed, including for gross misconduct.
The calculator uses the day-accrual method, the same approach behind the official GOV.UK holiday entitlement calculator. It looks at how much of the leave year the employee actually worked and gives them that proportion of the full annual allowance.
The proportion is worked out from exact calendar days, not whole months, so a leaver gets credit for every day worked. A worker who completes the full leave year is entitled to the whole allowance. Pay in lieu is then the days owed multiplied by a normal day's pay. For a fixed-salary worker, a week's pay is the annual salary divided by 52, and a day's pay is a week's pay divided by the number of working days in the week. This calculation step mirrors the method in our guide to unused annual leave when an employee leaves.
The steps
- Count the days in the leave year, from the start date to the day before its anniversary. This is 365, or 366 in a leap year.
- Count the days worked, from the leave year start to the last day of employment, inclusive.
- Divide days worked by days in the leave year to get the proportion worked.
- Multiply the annual allowance by that proportion to get accrued entitlement.
- Subtract holiday already taken. A positive figure is owed to the employee; a negative figure means they have overtaken their holiday.
- Multiply the days owed by the daily rate of pay for the cash figure.
Worked examples
Each example loads into the calculator above so you can adjust the figures.
13.88 − 10 taken = 3.88 owed
£31,200 ÷ 52 ÷ 5 = £120/day
20.94 − 12 taken = 8.94 owed
at £120/day
13.88 − 20 taken = −6.12
owed back, if a clawback clause exists
28 − 18 taken = 10 owed
at £95/day
Common situations
Frequently asked questions
Yes. An employer must pay an employee in lieu of any accrued but untaken statutory holiday when employment ends. This applies whether the person resigns, is made redundant, or is dismissed, including for gross misconduct. It is the only time statutory holiday can lawfully be paid instead of taken.
Accrued holiday is the full annual allowance multiplied by the proportion of the leave year worked. The GOV.UK approach counts the days from the leave year start to the leaving date, divided by the total days in the leave year, then multiplies that fraction by the annual allowance. Holiday already taken is then subtracted.
Only if it is agreed in the contract or in writing beforehand. ACAS is clear that an employer can deduct money from final wages for overtaken holiday only where there is a written clawback agreement. Without one, the overpaid holiday cannot be recovered from final pay.
For workers with fixed hours, holiday pay is based on a week's pay divided by the number of working days in the week. From an annual salary, a week's pay is the salary divided by 52. For variable pay, a 52-week reference period average should be used instead.
Yes. Accrued but untaken statutory holiday must be paid in lieu even where the employee is dismissed for gross misconduct. Statutory holiday pay on termination cannot be withheld as a penalty.
Yes. Holiday continues to accrue up to the contractual termination date, including during a worked notice period or garden leave. Use the final day of employment, not the last day attended, as the leaving date in the calculation.
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Sources
| Source | What it covers |
|---|---|
| GOV.UK: Taking holiday before leaving a job | Payment in lieu on termination, overtaken leave rules |
| GOV.UK: Calculate holiday entitlement | The official day-accrual methodology |
| ACAS: Holidays and final pay | Pay in lieu, deductions for overtaken holiday |
| ACAS: Calculating holiday pay | A week's pay and the reference period for variable pay |
| Working Time Regulations 1998, Regulation 14 | The statutory basis for pay in lieu on termination |