Holiday pay calculation under UK law
Practical UK holiday pay rules: 5.6 weeks, 52-week averaging, irregular workers and rolled-up pay.
Holiday pay calculation in the UK is straightforward in principle — every worker is entitled to 5.6 weeks’ paid leave a year — but quickly becomes complex once shifts, overtime and commission are part of the picture. The 2024 Working Time Regulations reforms reintroduced rolled-up holiday pay for irregular and part-year workers, but only for them, and only on tightly defined terms.
Statutory entitlement
The statutory minimum is 5.6 weeks per year (28 days for a 5-day week, including bank holidays if employer chooses). Many employers offer more.
| Worker type | Calculation |
|---|---|
| Full-time, 5 days/week | 28 days |
| Part-time, 3 days/week | 16.8 days |
| Shift, 4 on 4 off | 25.4 days |
| Compressed hours (e.g. 4-day) | 22.4 days at full hours |
| Term-time only | Pro-rated using 52-week reference |
Bank holidays can be inside or outside the 5.6 weeks at the employer’s discretion, but the contract must say which.
What goes into a “week’s pay”
Following the Bear Scotland line of cases, regular non-discretionary pay must be included.
| Element | In a week’s pay? |
|---|---|
| Basic salary | Yes |
| Contractual overtime | Yes |
| Non-guaranteed but regular overtime | Yes (4 weeks of leave) |
| Commission with intrinsic link to work | Yes |
| Truly discretionary bonus | No |
| Travel-time payments | Usually yes |
| Tips and gratuities | Generally no |
For a worker with irregular hours, you take the average pay over the previous 52 paid weeks (excluding unpaid weeks), not 12, since the 2020 reform.
The 2024 reform: rolled-up holiday pay
For leave years starting on or after 1 April 2024, employers can pay irregular-hours and part-year workers 12.07% on top of their hourly rate, paid at the same time as normal wages. This is rolled-up holiday pay — banned generally since 2006 but now legalised for these specific groups.
- Available only for irregular-hours and part-year workers
- Must be shown as a separate line on the payslip
- Must be 12.07% (or whatever percentage matches the contract’s leave entitlement)
- Cannot be used for fixed-hours full- or part-time workers
- Holiday must still be allowed even though paid in advance
- Documented in the employment contract clearly
Closing thoughts
Holiday pay disputes are easier to prevent than fix. Pair this with our PAYE Real Time Information article, the employer National Insurance guide, and the pension auto-enrolment explainer. The GOV.UK holiday entitlement guide has the latest detail. See pricing for payroll that calculates 52-week averages automatically.