Holiday pay when you leave a job

You're paid for holiday you've built up and not taken

When employment ends, you must be paid for statutory holiday you've built up in the current leave year and not taken. Your contract may give more, and may say how contractual holiday on top of the minimum is treated.

If you've taken more holiday than you've built up, your employer can only deduct it from your final pay if your contract or a written agreement allows it.

How much you build up

Most workers get 5.6 weeks a year, which is 28 days for someone working 5 days a week. It builds up through the leave year, so leaving halfway through means about half the year's holiday has been earned.

For irregular-hours and part-year workers, in leave years starting on or after 1 April 2024, holiday builds up at 12.07% of the hours worked in each pay period. Employers can also choose to pay holiday as it's earned, known as rolled-up holiday pay, for these workers.

What rate it's paid at

For the first 4 weeks, holiday pay should reflect normal pay, including regular overtime, commission and some allowances. Where pay varies, it's based on the average of the last 52 weeks in which you were paid.

Tax

Holiday pay is taxed and has National Insurance taken off like normal pay, even when it's paid alongside tax-free redundancy pay. If it's paid after your P45, payroll uses tax code 0T. You can usually claim back any extra tax.