UK holiday pay and holiday entitlement explained
How UK holiday pay and entitlement work: the 5.6 weeks' statutory minimum, part-time and irregular-hours staff, the 12.07% method and a week's pay.
Holiday pay is one of the areas of UK payroll that causes the most confusion, especially for employers with part-time, casual or zero-hours staff. This guide explains how much paid holiday workers are entitled to, how to work it out, and what counts as a week’s pay, in plain English.
The statutory minimum: 5.6 weeks
Almost every worker in the UK is legally entitled to a minimum of 5.6 weeks’ paid holiday a year. This is often called statutory annual leave, and it comes from the Working Time Regulations.
For someone who works a standard five-day week, 5.6 weeks works out at 28 days a year. The 5.6 weeks is capped at 28 days for the purposes of the statutory minimum, so a six-day-a-week worker is still entitled to 28 days rather than more.
A few points worth being clear on:
- The 5.6 weeks is a legal floor. A contract can offer more generous holiday, but never less.
- An employer can choose whether the bank holidays are included within the 5.6 weeks or given on top. There is no automatic legal right to take bank holidays off as paid leave; it depends on the contract.
- Holiday builds up (accrues) from the first day of employment, including during the first year.
Full-time and part-time entitlement
Part-time staff are entitled to the same 5.6 weeks, worked out pro rata to the days or hours they work. The principle is that a part-timer should not be treated less favourably than a full-timer.
The simplest way to work out a part-timer’s entitlement in days is to multiply the number of days they work each week by 5.6.
| Days worked per week | Statutory holiday (5.6 x days) |
|---|---|
| 5 days | 28 days |
| 4 days | 22.4 days |
| 3 days | 16.8 days |
| 2 days | 11.2 days |
Because pro-rata entitlement rarely lands on a whole number, many employers manage holiday for part-timers in hours rather than days, which avoids awkward fractions of a day.
Irregular-hours and part-year workers: the 12.07% method
Working out holiday for staff whose hours change from week to week, or who only work part of the year (such as term-time-only staff), is harder because there is no fixed working week to base it on.
For irregular-hours workers and part-year workers, holiday can be accrued at 12.07% of the hours actually worked in each pay period. So if someone works 40 hours in a period, they build up roughly 4.83 hours of paid holiday.
Where does 12.07% come from? The statutory 5.6 weeks of leave is 12.07% of the remaining 46.4 working weeks in the year once you take the holiday itself out of the 52 (5.6 divided by 46.4 gives 12.07%). This accrual method applies to leave years beginning on or after 1 April 2024 for these types of worker.
What counts as a week’s pay
Holiday pay is meant to reflect what a worker normally earns, not just their basic salary. For a worker with fixed hours and fixed pay, a week’s holiday pay is simply a normal week’s pay. For everyone else it is less straightforward.
The important principle is that certain regular extras must be included:
- Regular overtime, where it is worked often enough to count as part of normal pay
- Commission that is a normal part of earnings
- Regular bonuses and allowances linked to the work done
For workers without normal hours, holiday pay is usually based on average pay over a 52-week reference period, counting back over the weeks in which they were actually paid.
There is a technical split worth knowing: four weeks of the 5.6 come from EU-derived law and must include this “normal remuneration” (regular overtime, commission and so on). The remaining 1.6 weeks can, strictly, be paid at basic pay. Many employers simply pay all 5.6 weeks the same way to keep things straightforward and fair.
Rolled-up holiday pay
Rolled-up holiday pay means adding an uplift to a worker’s normal pay to cover their holiday, instead of paying them separately when they actually take leave.
For years this was not allowed. However, for irregular-hours and part-year workers, rolled-up holiday pay is now permitted for leave years starting on or after 1 April 2024. The uplift is the same 12.07% figure, added to pay for the work done. If you use it, you must:
- Calculate it at 12.07% of the pay for the work done in the period
- Show it as a separate line on the payslip, clearly identified
- Still allow the worker to take their leave, even though it has already been paid
Rolled-up holiday pay is not an option for regular, fixed-hours staff. For them, holiday must be paid when it is taken.
Getting holiday pay right
Holiday pay errors are one of the most common reasons for underpayment claims and National Minimum Wage breaches, particularly with variable-hours staff. Getting the accrual, the reference period and the “week’s pay” calculation right takes care every pay run.
We handle all of this as part of running your payroll: tracking entitlement, applying the correct accrual method, and including regular overtime and commission where the law requires it. Learn more about our outsourced payroll, or get a quote.