Holiday Pay When Leaving (UK)
Updated November 2026 · Free · No sign-up
Calculate holiday pay when leaving — UK leavers must be paid for accrued untaken statutory leave: (5.6 weeks × fraction of the leave year worked) − leave taken, at the proper 52-week rate, with clawback rules when you’ve overtaken.
Quick answer: Leaver’s formula: accrued = 5.6 weeks (28 days FTE) × (days of leave year worked ÷ 365) − days taken — the balance pays in the final salary at your NORMAL rate (OT/commission-inclusive for the core 4 weeks). Overtaken leave: deductible from final pay only with a written relevant agreement.
The Leaver Rules
| Accrual | Pro-rata across the leave year: entitlement × (period worked ÷ full year) — the WTR Reg 14 formula |
| Payout duty | Untaken STATUTORY leave must pay in lieu at termination — unwaivable; contractual extra days follow the contract (payout clauses vary) |
| Rate | A week’s normal pay — the 52-week average including regular overtime/commission for the 4-week core |
| Overtaken leave | Taken more than accrued? Deduction from final pay is lawful ONLY with a prior written agreement (contract clause) — silent contracts can’t claw back |
| Leave during notice | You can request it (normal approval rules); employers can REQUIRE it with notice of twice the leave’s length — the garden-leave-adjacent move |
Worked Examples
Example 1. 28 days, leaving 7 months in, 10 taken: accrued 16.3 − 10 = 6.3 days × £140 = £882 in the final pay.
Example 2 — overtaken. Same leaver with 20 taken: −3.7 days — recoverable (£518) only if the contract’s deduction clause exists; otherwise the employer eats it.
Example 3 — the never-paid contractor. Reclassified workers’ never-granted leave accumulates across YEARS and all pays at termination (the Smith v Pimlico line) — gig-economy leavers should always compute the full history.
Audit the Final Payslip
Check: the accrual fraction (leave-year start date matters — company years vs calendar), the RATE (basic-only payout of OT-heavy roles underpays), bank-holiday handling in part-years, and tax (leave payout is normal taxable pay — not the £30k exemption). Disputes: unlawful-deduction claims within 3 months of the final payday, ACAS first. Related exit math: PILON, redundancy.
Frequently Asked Questions
How is leaver’s holiday pay calculated?
Pro-rata accrual (entitlement × fraction of the leave year worked) minus days taken — the balance must pay in the final salary at the 52-week normal rate.
Can my employer deduct overtaken holiday?
Only with a prior written agreement (a contract clause) permitting it — without one, deduction from final pay is unlawful.
Can I be forced to use leave during notice?
Yes — with statutory notice of at least twice the length of the leave required (policy often shortcuts this; the formal rule is 2:1).
Is the payout taxed?
As normal earnings — PAYE and NI apply; it never falls within the £30,000 termination exemption.
What rate applies to the payout?
Normal remuneration — the 52-week average including regular overtime and commission for at least the 4-week core; basic-only payouts of variable earners are claimable shortfalls.
✓ Formula verified • Last updated: November 3, 2026