All workers in the UK have a statutory right to paid annual leave. But holiday pay is one of the most commonly underpaid entitlements, especially for part-time workers, shift workers, and those on irregular hours. This guide explains what you're entitled to, how holiday pay should be calculated, and what to do if you've been underpaid.
Key points
✓5.6 weeks a year, which is 28 days on a five-day week. Bank holidays can be counted inside that, so check your contract.
✓Part-time workers get it pro rata, holiday accrues from your first day, and agency workers match direct employees after 12 weeks.
✓This is where underpayment hides: regular overtime, commission, bonuses and shift allowances must all go into the calculation, averaged over the previous 52 weeks.
✓The four-week core entitlement can be carried over if sickness stopped you taking it. The extra 1.6 weeks normally cannot.
✓When you leave you must be paid for accrued but untaken holiday. Withholding it is an unlawful deduction from wages, not a disciplinary option.
How much annual leave are you entitled to?
The statutory minimum is 5.6 weeks of paid holiday per year. For a full-time worker doing a 5-day week, that's 28 days. For part-time workers, it's proportional to the days or hours worked.
✓Yes: 5.6 weeks = 28 days for a standard 5-day week worker
✓Yes: Bank holidays can be included in the 28-day entitlement, check your contract
✓Yes: Your employer may offer more than the statutory minimum, check your contract
✓Yes: Agency workers are entitled to the same annual leave as direct employees after 12 weeks
The 5.6-week entitlement is split into two 'pots': 4 weeks (EU-derived entitlement) and 1.6 weeks (UK domestic entitlement). This matters for carryover rules, see below.
How holiday pay should be calculated
Holiday pay must reflect your normal remuneration, not just basic pay. This was clarified in several important Employment Tribunal and Employment Appeal Tribunal cases.
✓Yes: Regular overtime (even voluntary) must be included in holiday pay calculations
✓Yes: Regular commission must be included
✓Yes: Regular bonuses paid as part of normal remuneration must be included
✓Yes: Shift allowances and unsocial hours payments should be included
✓Yes: The calculation is based on your average pay over the previous 52 weeks (or previous weeks worked if under 52 weeks)
Many employers still calculate holiday pay based on basic pay only. This is unlawful if you regularly receive overtime, commission, or other regular payments. You can claim backdated holiday pay going back up to 2 years.
Carrying over annual leave
The rules on carrying over unused annual leave changed from 1 January 2024:
✓Yes: The 4-week EU pot can be carried over if you were unable to take it due to sickness
✓Yes: The additional 1.6 weeks cannot normally be carried over (unless your contract says otherwise)
✓Yes: If your employer prevented you from taking leave, or failed to tell you you'd lose it, you may be able to carry it over
✓Yes: Leave accrued during sickness absence must be allowed to be taken or paid on termination
✓Yes: Irregular hours and part-year workers can now carry leave over between leave years
If you couldn't take your holiday because you were on long-term sick leave, maternity leave, or other statutory leave, your leave carries over and must be allowed or paid out.
Holiday pay when you leave a job
When your employment ends, you're entitled to be paid for any accrued but untaken holiday. This is called payment in lieu of notice (holiday) or a holiday pay element in your final pay.
✓Yes: Holiday accrues from day one of employment
✓Yes: On leaving, you're entitled to pay for all accrued but untaken holiday
✓Yes: Holiday is calculated pro-rata to the point you leave in the holiday year
✓Yes: Your employer cannot withhold holiday pay as a disciplinary measure
✓Yes: If you're owed holiday pay on termination and don't receive it, this is an unlawful deduction from wages
If you're not getting your holiday pay entitlement
1
Raise a grievance with your employer
Put your request in writing. Set out the entitlement you believe you're owed and how you've calculated it. Give your employer the opportunity to correct the error before escalating.
2
Contact ACAS
ACAS (0300 123 1100) can provide free advice and help you understand the strength of your claim.
3
Unlawful deduction from wages claim
Holiday pay claims can be brought as an unlawful deduction from wages claim at the Employment Tribunal. You must contact ACAS for early conciliation first. Time limit: 3 months minus one day from the last underpayment, or 6 months where that underpayment falls on or after 1 October 2026 under the Employment Rights Act 2025.
You can claim up to 2 years of underpaid holiday pay in some circumstances, but the time limit to bring a tribunal claim runs from the last underpayment, so don't delay.
All workers (including part-time and agency workers) are entitled to at least 5.6 weeks of paid holiday per year. For a full-time worker this is 28 days. Part-time workers get the same entitlement calculated pro-rata. Your employer can include bank holidays within this 5.6 weeks.
Should overtime be included in holiday pay?
Yes, following the Bear Scotland ruling. Regular overtime, commission, and other payments that are part of your normal remuneration must be included in holiday pay calculations. If your employer has been calculating holiday pay based only on basic pay while you regularly work overtime, you may be entitled to back pay.
Can I carry over unused holiday?
You can normally only carry over 1.6 weeks of your 5.6-week entitlement (the additional statutory weeks). However, if you were unable to take holiday due to sickness, maternity or other family leave, or because your employer refused your request or failed to tell you that leave would be lost, you may be entitled to carry over more. Irregular hours and part-year workers have their own carryover rules since 1 January 2024.
How far back can I claim underpaid holiday pay?
An Employment Tribunal cannot look at a deduction from more than 2 years before you brought your claim, under the Deduction from Wages (Limitation) Regulations 2014. Within that 2-year backstop, a series of underpayments can be claimed together, and the time limit runs from the last deduction in the series.
What happens to my holiday pay when I leave a job?
When you leave, you are entitled to payment in lieu for any accrued but untaken holiday for the current leave year. Your employer cannot require you to forfeit accrued holiday on leaving. If you are dismissed or resign with notice, you should also receive pay for any holiday that falls within your notice period.