Holiday pay

By Tolley in association with Sarah Bradford
Holiday pay

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

  • Holiday pay
  • Statutory holiday pay
  • Contractual holiday pay
  • Contractual and statutory holiday pay

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. For details on this, and bringing all the relevant tax issues together in one easily accessible place, we have a dedicated Tolley COVID-19 Toolkit .

Statutory holiday pay

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

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

SI 1998/1833, reg 16(1)

The Employment Ri

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