Holiday pay

Produced by Tolley in association with Sarah Bradford
Holiday pay

The following Employment Tax guidance note Produced by Tolley in association with Sarah Bradford provides comprehensive and up to date tax information covering:

  • Holiday pay
  • Statutory holiday pay
  • Calculating statutory holiday pay
  • Overtime
  • Rolled up statutory holiday pay
  • Statutory holiday pay on termination
  • Contractual holiday pay
  • Contractual and statutory holiday pay

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant tax changes associated with Brexit began to take effect. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit ― personal and employment tax implications guidance note.

The right to be paid for holidays is a statutory entitlement and there may also be a further contractual entitlement. Almost all workers are entitled to 5.6 weeks paid holiday per year (which can include bank holidays). Self-employed workers have no statutory leave entitlement.

Due to the coronavirus (COVID-19) pandemic, the Government has announced new regulations in relation to rolling over holiday into the next two years, see the Effect of coronavirus (COVID-19) on carrying over annual leave guidance note.

Statutory holiday pay

The Working Time Regulations 1998 entitle a worker to be paid:

  1. during his statutory holiday, entitlement of 5.6 weeks a year

  2. in lieu of any statutory holiday entitlement accrued but unused on termination of his employment

This does not prevent an employer offering a more generous annual paid leave entitlement as part of a contract of employment.

Calculating statutory holiday pay

During any period of statutory holiday, a worker is entitled to be paid at the rate of a week’s pay for each week of holiday.

The Employment Rights Act sets out the method of calculating a week’s pay except that referen

Popular documents