How statutory UK holiday pay is calculated
Under the Working Time Regulations 1998 and the Employment Rights Act 1996, all workers in the UK are legally entitled to 5.6 weeks of paid statutory annual leave each leave year. Holiday pay must reflect a worker's normal remuneration, ensuring they are not financially disincentivised from taking statutory time off.
The method used to calculate your holiday pay depends directly on your working pattern and pay arrangement:
1. Salaried employees: Holiday pay is calculated based on your normal fixed gross salary. For a full-time employee working 5 days per week, one week of holiday pay equals your annual salary divided by 52, and one day of holiday pay equals that weekly figure divided by your contracted working days.
2. Fixed hourly workers: If you work fixed contracted hours at an hourly rate, your holiday pay simply equals your standard hourly rate multiplied by the holiday hours taken.
3. Variable hours or shifts: If your hours or pay vary from week to week, employers must calculate your holiday pay using a 52-week reference period. This takes your total gross earnings over the previous 52 weeks worked (excluding unpaid weeks, looking back up to a maximum of 104 weeks) and divides it by 52 to establish your average weekly pay.
4. Irregular hours and part-year workers: Following the April 2024 employment reforms, employers of irregular-hours and part-year workers can use the statutory 12.07% accrual method and pay rolled-up holiday pay as an additional 12.07% uplift on each hour worked.
Worked example: Salaried employee taking 5 days leave
Suppose you earn £35,000 per year and work a standard 5-day, 37.5-hour working week (Monday to Friday). You request 5 days (1 full week) of paid annual leave.
Your weekly holiday rate is calculated as £35,000 / 52 = £673.08. Your daily holiday pay rate is £673.08 / 5 = £134.62 per day, and your hourly equivalent rate is £673.08 / 37.5 = £17.95 per hour.
For taking 5 holiday days, your holiday pay entitlement equals 5 x £134.62 = £673.08 gross.
Over a full leave year, your statutory 5.6 weeks (28 days) entitlement represents £3,769.23 in paid time off.
Worked example: Irregular worker under the 12.07% accrual rule
Suppose you work irregular zero-hours shifts earning £15.00 per hour, and in the current monthly pay period you complete 160 hours of work.
Under the statutory accrual formula introduced for leave years starting on or after 1 April 2024, statutory annual leave accrues at 12.07% of the hours worked in each pay period (5.6 weeks / 46.4 working weeks = 12.07%).
Your accrued holiday leave for the period equals 160 x 12.07% = 19.31 hours.
At your pay rate of £15.00 per hour, your statutory holiday pay due for that pay period equals 19.31 hours x £15.00 = £289.68 gross.
Inputs for the Holiday pay calculator
Employment and pay arrangement
Select whether you are paid a fixed annual salary, a fixed hourly rate, variable shift wages requiring 52-week averaging, or irregular hours using 12.07% accrual.
Gross annual salary
Your total yearly contracted pay before Income Tax, National Insurance, or pension contributions are deducted.
Hourly pay rate
Your agreed gross pay rate per hour of work.
Hours worked in pay period
For irregular hours workers, the total number of hours worked during the pay period to calculate statutory 12.07% leave accrual.
Total earnings across 52-week reference period
For variable shift workers, your total gross earnings across the past 52 weeks worked, ignoring any weeks with zero pay.
Working days and hours per week
Your contracted or typical number of working days and weekly working hours, used to derive daily and hourly pay equivalents.
Holiday taken
The number of holiday days or hours you are taking off or claiming in the relevant pay period.
CALCULATOR QUESTIONS
Holiday pay calculator questions
How is holiday pay calculated for variable hours in the UK?
Employers must calculate average weekly pay using a 52-week reference period. This takes your total gross earnings over the 52 weeks in which you carried out work immediately before the holiday, ignoring weeks where no work was performed (going back up to 104 weeks), and divides by 52.
What is the 12.07% holiday accrual rate?
The 12.07% rate is the statutory holiday accrual percentage for irregular-hours and part-year workers. It is derived from the standard 5.6 weeks statutory entitlement divided by the 46.4 remaining working weeks in a 52-week year (5.6 / 46.4 = 12.07%).
Is rolled-up holiday pay legal in the UK?
Yes. For leave years beginning on or after 1 April 2024, UK employment law formally permits employers to use rolled-up holiday pay for irregular-hours and part-year workers, paying an additional 12.07% on top of their hourly earnings in each pay period.
Does overtime count towards UK holiday pay?
Yes. Guaranteed, contractual, and regular non-guaranteed overtime must be included when determining a worker's normal remuneration for the initial 4 weeks of EU-derived statutory annual leave.