Holiday and pay
Holiday pay calculation UK: choose the right method
Holiday entitlement tells you how much time off a worker has. Holiday pay tells you what that time is worth. Choose the pay method from the actual working arrangement before doing the arithmetic.
- Usual reference for variable pay
- 52 paid weeks
- Maximum look-back to find paid weeks
- 104 weeks
- Holiday records from 6 April 2026
- 6 years
Guidance for England, Scotland and Wales. Northern Ireland employment rules can differ.
Match the method to the working pattern
A worker with regular hours and fixed pay usually receives their normal week's pay for a week's holiday. Variable pay and shift arrangements need the relevant average-pay calculation.
For regular-hours workers, at least four weeks of statutory leave must be paid at the normal rate, including relevant regular overtime and commission. The other 1.6 weeks can use basic pay. For irregular-hours and part-year workers under the current rules, statutory leave is paid at the normal rate.
| Working arrangement | Starting point |
|---|---|
| Regular hours, fixed pay | Usual week's pay, including required normal-pay elements |
| Variable pay or relevant shift pattern | Use the applicable average-pay calculation |
| Irregular hours or part-year | Pay when leave is taken, or permitted rolled-up holiday pay |
Source: GOV.UK: holiday pay and records
Use the reference period correctly
Where the 52-week average applies, count weeks in which the worker was paid. Look back up to 104 weeks to find 52 paid weeks. If the worker has fewer qualifying weeks, use the available full weeks under the guidance.
Do not insert zero-pay weeks into the average just to reach 52. Keep the weeks selected, pay components and calculation with the payroll record so a later query can be answered from the evidence.
Source: GOV.UK: holiday pay and records
Know when rolled-up pay is allowed
For leave years starting on or after 1 April 2024, employers can use rolled-up holiday pay for qualifying irregular-hours and part-year workers. This is an additional 12.07% of total pay for the pay period, shown separately on the payslip.
It is not permitted for regular-hours workers. The arrangement must still allow actual time off, and special rules apply during sickness and statutory leave. Check whether introducing it changes the contract.
Source: GOV.UK: holiday entitlement and pay reforms · GOV.UK: holiday pay and records
Keep a record of the result
From 6 April 2026, employers must keep detailed annual leave and holiday pay records for at least six years from creation. Record time taken and the amount paid, with enough detail to explain the method.
An entitlement calculator is useful for planning, but the payroll calculation still needs actual pay history and the correct normal-pay elements.
Source: GOV.UK: holiday pay and records
In practice
A simple fixed-pay example
Assume an employee works five equal days each week and earns fixed gross pay of £600 a week, with no additional normal-pay elements. One week's holiday is worth £600; a single equal working day is £120.
Do not reuse that daily figure for a colleague with unequal shifts, commission or varying pay. Classify their arrangement and calculate it separately.
Your next steps
- Confirm the working pattern and whether the calculation concerns time off or money.
- Identify normal-pay elements and any applicable reference period.
- Keep the actual weeks and earnings used in an average.
- Record the holiday taken and payment, retaining the records for the required period.
Sources and review
Reviewed against the official guidance below on 7 September 2026. Rates and employment rules can change; use the linked guidance for a decision about an individual case.
Contains public sector information licensed under the Open Government Licence v3.0. Crown copyright. This is Leavely's independently written guide.
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