How to calculate UK holiday pay

Method 1 — Salaried worker

Each week of holiday = one normal week's pay. Includes regular fixed allowances (car, phone) if they don't reduce during leave.

Example: £35,000 salary → £673.08/week gross → £673.08 per week of holiday.

Method 2 — Hourly worker with regular hours

Same as salaried if hours are consistent. Include regular overtime + commission averaged over 52 weeks.

Method 3 — Hourly worker with variable hours

52-week reference period: - Add up pay in last 52 weeks worked (excluding zero-pay weeks + weeks of statutory leave) - Divide by 52 to get average weekly pay - One week's holiday = that average

Include: overtime (regular), commission (regular), performance bonus. Exclude: irregular one-off payments.

Method 4 — Irregular hours / part-year workers (2024+)

Two options since April 2024:

Option A: 12.07% accrual - 12.07% of hours worked accrues as holiday - Take holiday later; paid at time of taking

Option B: Rolled-up holiday pay - Add 12.07% to normal hourly rate - Worker takes unpaid holiday - Must be shown separately on payslip

Worked examples

Salaried £35,000, 4-week holiday

• Weekly gross: £673.08
• 4 weeks holiday: £2,692.32 gross

Hourly £15/hr with irregular overtime

• 52 weeks: 1,900 hours × £15 = £28,500 + £3,500 overtime = £32,000 total
• Average weekly: £615.38
• 1 week holiday: £615.38

Zero-hour worker (rolled-up)

• Normal rate £12/hr → rolled-up rate £13.45/hr (12.07% uplift)
• Payslip shows £12 basic + £1.45 holiday accrual

In short

Salaried: normal week. Hourly regular: same. Variable: 52-week average including overtime + commission. Irregular: 12.07% accrual or rolled-up.