Holiday pay in the UK must reflect your normal pay — not just your basic salary. If you regularly work overtime, earn commission, or receive shift premiums, your employer must include these in the calculation. Getting this wrong is one of the most common employment rights breaches in the UK, and you can claim back up to 2 years of underpayments at an Employment Tribunal.
Here is a clear guide to how holiday pay is calculated in 2026, including the rules for irregular and zero-hours workers.
Statutory Holiday Entitlement in 2026
All UK workers are entitled to a minimum of 5.6 weeks (28 days) of paid holiday per year. This applies from the first day of employment.
| Worker type | Statutory entitlement |
|---|---|
| Full-time (5 days/week) | 28 days (5.6 weeks) |
| Part-time (3 days/week) | 16.8 days (5.6 × 3) |
| Zero-hours / irregular | Accrued as you work |
| Agency workers | Same rights after 12 weeks |
Bank holidays (usually 8 per year in England and Wales) can be counted as part of the 28 days, unless your contract says otherwise. Many employers choose to give bank holidays on top of 28 days — this is contractual and cannot be enforced by statute.
You accrue holiday from day one. There is no qualifying period for basic statutory entitlement.
What Must Be Included in Holiday Pay?
Since a series of Employment Tribunal and Supreme Court rulings, the law is clear: holiday pay must be based on your normal pay, not just basic salary.
Must be included:
- Regular overtime (including non-guaranteed overtime that is regularly worked)
- Commission (if regularly earned)
- Shift premiums and unsocial hours pay
- Regular bonuses linked to personal performance
Must NOT be included:
- Purely voluntary, one-off overtime
- Irregular bonuses with no pattern
- Expense reimbursements
- Benefits in kind
The reference period for calculating average pay is the previous 52 weeks of actual worked weeks (excluding any weeks where no pay was received). This 52-week reference period was introduced in April 2020 under the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018.
How Holiday Pay Is Calculated for Regular Employees
For employees who work a fixed number of hours each week on a regular salary, the calculation is straightforward.
Worked Example 1: Regular Salaried Employee
Emma earns £35,000 a year and works 5 days per week, 52 weeks per year.
- Annual salary: £35,000
- Working days per year: 260 (52 weeks × 5 days)
- Daily rate: £35,000 ÷ 260 = £134.62
- Statutory holiday: 28 days
- Annual holiday pay: 28 × £134.62 = £3,769
If Emma takes 2 weeks’ holiday (10 working days), her holiday pay for that period is 10 × £134.62 = £1,346.20 — effectively the same as her normal pay for those days.
How Holiday Pay Is Calculated for Variable Pay Workers
Where pay varies week to week (due to overtime, commission, or shift patterns), the employer must calculate average weekly pay over the previous 52 weeks.
Step 1: Take all pay received in the last 52 weeks where pay was actually earned (exclude weeks with no pay).
Step 2: Divide by the number of weeks used.
Step 3: Multiply by the fraction of the week being taken as holiday.
Worked Example 2: Employee With Regular Overtime
James is a warehouse operative earning a basic wage of £22,000, but he regularly earns an additional £5,000–£7,000 per year in overtime.
Over his 52-week reference period:
- Total earnings: £27,500 (including overtime)
- Average weekly pay: £27,500 ÷ 52 = £528.85
If James takes one week’s holiday, his holiday pay is £528.85 — not just his basic weekly rate of £423.08.
Paying him only his basic rate would be an unlawful deduction from wages.
The Harpur Trust v Brazel Ruling — What Changed for Irregular Workers
The Supreme Court case Harpur Trust v Brazel [2022] fundamentally changed holiday pay rules for workers without regular working patterns — including term-time workers, zero-hours workers, and seasonal employees.
Before the ruling, many employers used the 12.07% method — multiplying total earnings by 12.07% to calculate holiday pay. This was seen as a simple way to pro-rate holiday for workers who did not work year-round.
The Supreme Court ruled this method is unlawful. The reason: the 5.6-week statutory entitlement does not reduce just because someone works fewer weeks per year. A term-time worker still gets 5.6 weeks of holiday — those weeks are just applied to fewer actual working weeks.
The correct method for irregular workers (post-Brazel):
- Count the number of actual weeks worked in the year
- Calculate average weekly pay over those weeks
- Entitlement = 5.6 × (weeks worked ÷ 52) weeks of holiday
- Holiday pay = entitlement in weeks × average weekly pay
Worked Example 3: Term-Time Worker
Lisa works as a teaching assistant on a term-time only contract. She works 30 weeks of the year. Her average weekly pay during those weeks is £280.
- Weeks worked: 30
- Holiday entitlement: 5.6 × (30 ÷ 52) = 3.23 weeks
- Holiday pay: 3.23 × £280 = £904 per year
Under the old 12.07% method, her employer would have calculated: 30 weeks × £280 × 12.07% = £1,014. This may seem higher, but it was ruled unlawful because the 5.6-week entitlement was being pro-rated — which the Supreme Court said was not permitted.
Rolled-Up Holiday Pay — Is It Legal?
Rolled-up holiday pay means adding a holiday pay supplement to every pay packet rather than paying a full week’s wage when you actually take holiday. This was historically ruled unlawful by the EU Court of Justice.
However, from 1 January 2024, UK regulations now permit rolled-up holiday pay for:
- Irregular hours workers
- Part-year workers
It must be:
- Calculated at 12.07% of earnings (for these worker types specifically)
- Clearly identified as a separate payment on payslips
- Agreed between employer and worker
Rolled-up holiday pay remains unlawful for workers with regular, fixed hours.
What If Your Employer Has Underpaid?
If you believe your holiday pay has been underpaid — for example, overtime or commission has not been included — you can:
- Raise it informally with your employer first
- Submit a formal grievance if the issue is not resolved
- Claim at Employment Tribunal for unlawful deduction from wages
You can claim back up to 2 years of underpayments. The tribunal claim must be brought within 3 months of the most recent deduction (or the last in a series of deductions). A gap of more than 3 months between underpayments may break the chain, limiting how far back you can recover.
ACAS provides a free Early Conciliation service before tribunal — this is a required step in the process.
Part-Time Workers and Holiday Pro-Rata
Part-time workers receive the same 5.6-week entitlement, calculated proportionally to the days or hours they work.
| Days worked per week | Annual holiday entitlement |
|---|---|
| 5 days | 28 days |
| 4 days | 22.4 days |
| 3 days | 16.8 days |
| 2 days | 11.2 days |
| 1 day | 5.6 days |
Part-time workers cannot be treated less favourably on holiday than full-time workers. If full-timers get 30 days, part-timers must get the equivalent proportion.
For more on employment rights generally, including your rights on zero-hours contracts and redundancy, see our guides on employment rights, zero-hours contract rights, holiday entitlement, and redundancy rights.