Holiday Pay

Holiday pay and how much is my employee entitled to!

The Regulations give UK workers the right to a minimum of 5.6 weeks’ paid leave per leave year. This entitlement also includes public and bank holidays. For full-time staff on a five-day week, this means 28 working days and pro-rata for part-time staff. If an employee that works more than 5 days per week still only get 28 working days. Employers can also give workers more holiday than the statutory minimum should they wish to do so. Workers right to holiday applies from their first day of employment.

This entitlement not only applies to employees but also to other service providers, unless they are in business on their own account. This means certain contractors or must also be given a paid holiday.

There is no legal requirement for employees to have time off on bank or public holidays or to receive extra pay for working those days, although many employers choose to do so. For example, if a place of work is closed on bank holidays, the employer can make staff take these days as part of their annual leave entitlement. By doing so, the employee has no choice about taking holiday on the bank holiday and can only choose when to take the remaining days. Record clearly in the employment contract what your workplace arrangements are for bank holidays.

Employers can insist on workers to take their holiday on specific dates by giving twice as much notice as the amount of holiday required (eg two weeks’ notice of one week’s holiday), unless of course something different is stated in the contract. Except on termination, employers cannot ‘buy out’ the right to holidays.

When employees leave, employers must pay them for accrued but untaken holidays in respect of the statutory minimum holiday requirement. For any holiday above the statutory minimum and for how you calculate the payment due for the unused holiday, you can set your own rules in the contract.

The accrual rate for new employees is given at the rate of one-twelfth of the statutory entitlement, rounded up to the nearest half day, on the first day of each month of the first year. Holidays are an integral part of an employee’s contract of employment and there are minimum requirements. Holiday pay is also very important and how this fit with sickness absence and other periods of absence such as maternity leave, shared parental leave and annual shutdowns.

What should contracts say about holidays?

As well as the basic information about the amount of holiday provided to your employees, consider including:

  • the minimum notice that staff must give to take a holiday
  • the maximum holiday that can be taken at one time
  • a requirement that staff use up their holiday in their notice period
  • the right to make a deduction from pay on termination of employment if the holiday has been taken in excess of the accrued amount
  • how payment in lieu of unused holiday will be calculated
  • what the rules are about carrying unused holiday forward from one year to the next


Karin Henson is an expert UK employment law solicitor

Aeris Employment Law can advise you on any aspect of holiday issues that you need support on, including what to do with employees who do overtime or are paid a commission.

For more information on how we can help with holiday pay, contracts or any UK employment law issue, contact our specialist UK employment law solicitor Karin Henson on 0121 392 7479 or please complete our online inquiry form.



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