Holiday pay calculator UK

The 52-week reference period

A week's pay for a worker without normal working hours, or whose pay varies with the work done, is set by sections 221 to 224 of the Employment Rights Act 1996. Since 6 April 2020, when the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 came into force, the reference period is 52 weeks. Before that it was 12. GOV.UK puts it plainly: take the average rate over the last 52 weeks.

The average is total gross pay in the reference period divided by the number of weeks counted. That gives a week's holiday pay. To book a single day, divide the week's pay by the number of days the worker normally works. Someone averaging £360 a week over four days gets £90 for each day of leave.

Weeks with no pay are skipped

The 52 weeks are 52 paid weeks. GOV.UK says that if no pay was paid in any week, you count back another week so the rate is based on 52 weeks in which pay was paid. A casual bar worker who was not offered shifts for six weeks in January has those six weeks dropped, and six older weeks pulled in to take their place. If you simply total a year of payslips and divide by 52, every empty week drags the average down and the holiday is underpaid.

Never more than 104 weeks back

The search for paid weeks stops at 104 weeks before the leave. If a worker has only been paid in 30 weeks inside that window, the average is over 30. You do not reach further back, and you do not add zero weeks to make up 52.

Fewer than 52 weeks of history

New starters are the most common case. GOV.UK says that if a worker has less than 52 weeks of pay, use the average pay rate for the full weeks they have worked. Someone in their eighth week is averaged over their completed paid weeks. This calculator flags a short history so you know which situation you are in.

What counts as pay: the 4 weeks and the 1.6 weeks

Statutory leave is 5.6 weeks, made up of 4 weeks under regulation 13 of the Working Time Regulations 1998 and 1.6 weeks under regulation 13A. For the regulation 13 weeks, holiday pay must reflect normal pay: basic pay plus regular overtime, commission and payments linked to the job, such as shift premiums and payments for length of service or professional qualifications. The 1.6 weeks may lawfully be paid at basic pay. Most small employers find it simpler and fairer to use the full average for all 5.6 weeks, and nothing stops you doing so. Expenses and genuinely one-off discretionary bonuses are left out.

Rolled-up holiday pay at 12.07%

For irregular-hours and part-year workers, in leave years beginning on or after 1 April 2024, you may pay rolled-up holiday pay instead: an extra 12.07% of the pay for each pay period, shown on its own line on the payslip. The figure comes from 5.6 weeks of leave divided by the 46.4 weeks worked in a year. If you pay rolled-up holiday pay, the worker still takes their leave, but it is unpaid when taken because it was paid in advance. Pay one way or the other, never both. Rolled-up pay is not allowed for workers with regular hours.

A worked example

A care assistant on variable hours books a week off. Over the last 60 weeks they had 54 paid weeks and 6 with no shifts. You take the most recent 52 paid weeks, skipping the 6 empty ones, which reaches back 58 weeks in total. Those 52 weeks add up to £18,720 including regular overtime. £18,720 ÷ 52 = £360 a week. They work four days a week, so a day of holiday is £360 ÷ 4 = £90. If they were on rolled-up pay instead, a £360 week would carry an extra £360 × 12.07% = £43.45.

Sources

• GOV.UK: Holiday pay, the basics
• GOV.UK: Holiday pay (52 weeks, unpaid weeks, 104-week limit, rolled-up pay)
• GOV.UK: Calculating holiday pay for workers without fixed hours or pay
• Employment Rights Act 1996, sections 221 to 224
• The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018

This calculator gives an estimate for guidance. It is not legal advice.