Check you've got the right amount of holiday pay
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:
work fixed hours
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 12 weeks.
Add together your pay for the previous 12 weeks - including any overtime, commission or bonuses you got during that time. Then divide that by 12 to get your weekly average pay.
You should only use weeks in which you actually worked. If you didn’t work in one any of the last 12 weeks, count back another week, so that you have 12 weeks in total.
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 12 weeks. Add together your pay for the previous 12 weeks - including any overtime, commission or bonuses you got during that time. Then divide that by 12 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 different period.
Your employer must include overtime, commission or bonuses for the first 4 weeks of your holiday pay.
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 12 weeks - including any overtime, commission or bonuses you got during that time. Then divide that by 12 to get your weekly average pay.
Step 2: add together the number of fixed hours you did in the past 12 weeks and divide that by 12 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 12 weeks.
Step 2: divide the answer you got in Step 1 by 12. 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 your 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 12 weeks or didn't work in all of the previous 12 weeks
If you haven’t worked for 12 weeks yet, calculate an average over the period you have worked.
If that doesn’t seem to give an accurate estimate of what you would have got if you had been working, you should argue for a different period.
If you didn’t work for a week in the 12-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.
This means if you work less than usual for 12 weeks and then go on holiday, you’ll get less holiday pay. If that happens, you could argue that it should be calculated over a longer period. If you want to do this, get help from your nearest Citizens Advice.
If you need help working out your holiday pay, contact your nearest Citizens Advice.
How to calculate your client’s holiday pay
The first 4 weeks of your client’s holiday pay should include amounts for:
supplements and allowances paid separately from basic pay - like bonuses
commission, whether based on the amount of work done or on results
After 4 weeks, an employer only has to include basic pay in your client’s holiday pay. In practice, most will continue to pay the full amount.
This is because your client’s statutory holiday entitlement of 5.6 weeks is made up of 4 weeks which come from EU law and 1.6 weeks which come from UK law. Different rules might apply to each of these parts because of that.
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, contact your nearest Citizens Advice.
Rolled-up holiday pay
An employer might pay staff who work irregular hours an extra 12.07% of their gross hourly pay as holiday pay. That’s the amount of paid holiday a worker accrues for each hour they work. The employer then doesn’t pay them while they’re on holiday.
This means that the worker has to put that amount aside for when they’re on holiday. Rolled-up holiday pay is bad practice because it discourages people from taking holiday.
The European Court of Justice has ruled that rolled-up holiday pay is unlawful but the government hasn’t amended the Working Time Regulations.
If an employer has clearly set out the rolled up element in the client’s contract or pay slips, they can offset the rolled up holiday pay against any holiday pay due to the client.
This means if the client has already received enough rolled up holiday pay to cover the holiday they’re taking, they won’t be able to claim any extra. If they haven’t received enough, they could make a tribunal claim for the shortfall.
If it’s not set out clearly, your client could take the holiday and then claim for the amount in full when they aren’t paid for it in their next pay packet. You could argue that a tribunal should order that your client be paid on the basis that the rolled-up holiday pay wasn’t set out clearly.
If your client is still being paid rolled-up holiday pay, you might want to help them write to their employer to ask them to change how they calculate holiday pay.
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 your nearest Citizens Advice.
Making a claim for underpaid holiday pay
If your client hasn’t had enough holiday pay, they might be able to make a claim for unauthorised deductions from wages. They must make their claim within 3 months less one day of the last time they weren’t paid the correct amount.
If they make their claim within that time, it can include earlier periods when they weren’t paid the right amount. It can go back up to 2 years before the date of the claim. If there’s a break of 3 months or more, the claim can only go back as far as that break.