Redundancy and annual leave UK: settling holiday correctly

Guidance for England, Scotland and Wales. Northern Ireland employment rules can differ.

Confirm the employment end date

An employee may work their notice, remain employed during a period away from the workplace or leave immediately with payment in lieu of notice. Check the actual arrangement and contract before calculating holiday.

Use the termination date for the leave entitlement calculation. A payment described as notice pay does not by itself tell you whether employment continues for that period.

Source: GOV.UK: redundancy and notice periods · GOV.UK: holiday when leaving a job

Taking holiday during the notice period

An employee may request remaining holiday during notice. The employer can also require leave to be taken if it follows the applicable contractual or statutory notice rules.

Keep consultation, handover and holiday arrangements clear. Requiring holiday at short notice without checking the rules can create a separate dispute at an already difficult time. Confirm any approved or required dates in writing.

Source: GOV.UK: booking time off · GOV.UK: holiday when leaving a job

Pay for the unused statutory balance

At termination, unused accrued statutory holiday must be paid. Calculate the amount from the leave year, entitlement method, valid carry-over and leave already taken, then apply the correct holiday pay rate.

Extra contractual holiday can have different termination terms. A deduction for holiday taken beyond accrued entitlement requires prior written agreement. Show holiday pay, notice pay and redundancy pay separately so the employee can follow each calculation.

Source: GOV.UK: holiday when leaving a job · GOV.UK: holiday pay and records

In practice

Reconcile the balance before issuing the final figures

An employee has 12 days accrued at the agreed termination date and has taken eight. Two more days are approved during notice. Assuming no other adjustments, two days remain to be paid at termination.

If the termination date changes during the process, run the calculation again. Keep the earlier draft clearly marked so payroll does not use an out-of-date settlement.

Your next steps

Confirm the notice arrangement and legal termination date.
Reconcile accrued entitlement, carry-over and leave already taken.
Apply the correct notice to any holiday required during employment.
Give payroll and the employee the same final holiday calculation.

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.