You shouldn’t get less pay when you’re on holiday than when you’re working. The paid holiday the law says you’re entitled to is called ‘statutory paid holiday’. For each week of statutory paid holiday you take, you’re entitled to a week’s pay.
How much you’ll be paid when you’re on holiday depends on whether you:
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work fixed hours
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get the same amount of pay every week
‘Fixed hours’ means the set number of hours you’ve agreed you’ll work – for example, 8 hours a week, 9am to 5pm from Monday to Friday, or a shift pattern with a set number of hours.
You work fixed hours and get the same pay every week
You should be paid what you normally earn.
You don’t have any fixed working hours
This might apply to you if you’re on a zero hours contract.
To work out how much holiday pay you should be paid, you should work out your average weekly pay over the last 52 weeks.
Add together your pay for the previous 52 weeks – including any overtime, commission or bonuses you got during that time. Then divide that by 52 to get your weekly average pay.
You should only use weeks in which you actually worked. If you didn’t work in one of the last 52 weeks, count back another week, so that you have 52 weeks in total. The furthest you can count back is 104 weeks.
You work fixed hours but your pay varies because of overtime, commission or bonuses
Your holiday pay should be the same as what you normally earn including any regular overtime, commission or bonus.
Overtime that you’ve only done twice in 6 months probably isn’t regular enough. But if you’ve worked overtime in 5 of the last 8 weeks, it might.
There’s no set way of working out how much to include if your overtime, commission or bonus is different every week.
Start by working out how much your average weekly pay was over the past 52 weeks. Add together your pay for the previous 52 weeks – including any overtime, commission or bonuses you got during that time. Then divide that by 52 to get your weekly average pay.
If you think the amount isn’t about the same as what you would have earnt if you weren’t on holiday, ask your employer to use the average for a different period. The furthest back you can go to find a different period is 104 weeks.
Your employer must include overtime, commission or bonuses for the first 4 weeks of your holiday pay. Your remaining 8 days’ holiday pay will be paid at your basic rate.
You have fixed hours of work but your pay varies because you work different hours
This might apply to you if you work shifts or you’re on a rota.
Follow these steps to work out how much holiday pay you should get:
Step 1: add together your pay for the previous 52 weeks – including any overtime, commission or bonuses you got during that time. Then divide that by 52 to get your weekly average pay.
Step 2: add together the number of fixed hours you did in the past 52 weeks and divide that by 52 to get an average of your weekly hours.
Step 3: divide the answer you got in Step 1 by the answer you got for Step 2. This gives you your average hourly rate of pay.
Step 4: multiply the answer you got in Step 3 by the number of hours of holiday you took. This will give you the amount you should be paid for your holiday.
You work fixed hours but your pay varies depending on how much work you do
This might apply to you if you do ‘piece work’ – this means how much you’re paid depends on how many items or tasks you complete. For example, if you work in a car wash and are paid by how many cars you wash.
Follow these steps to work out how much holiday pay you should get:
Step 1: add together all the pay you got in the last 52 weeks.
Step 2: divide the answer you got in Step 1 by 52. This gives you your average weekly pay.
Step 3: divide the answer you got in Step 2 by your fixed hours of work. This gives you your average hourly rate.
Step 4: multiply the amount in Step 3 by the number of hours holiday you took. This will give you the amount you should be paid for your holiday.
If you haven’t worked for 52 weeks or didn’t work in all of the previous 52 weeks
If you haven’t worked for 52 weeks yet, calculate an average over the period you have worked.
If you didn’t work for a week in the 52-week period, use the week before to make up the difference. For example if you were off sick or have a zero-hours contract and weren’t given any work.
The furthest back you can go to find a longer period is 104 weeks.
If you need help working out your holiday pay, talk to an adviser.
If your holiday pay has been included in your hourly pay
Your employer might say that you don’t get holiday pay because your holiday pay is included in your hourly rate. This is called ‘rolled-up’ holiday pay. You might be paid this way if you’re an agency worker or on a zero-hours contract.
Employers shouldn’t use rolled up holiday pay. If they do, show them the guidance on GOV.UK. If they refuse to change it, consider raising a grievance. If they still refuse to change, talk to an adviser.
If your employer hasn’t paid you the right amount of holiday pay
Your first step should be to try to resolve an issue with your employer directly, if you can.
You’ll need your payslips to prove how much you’ve been paid and evidence to back up your claim that the holiday pay is not enough. For example, if your employer hasn’t included overtime in the calculation you’ll need to show how much overtime you’ve worked.
If you need help getting all your holiday pay, contact us.