Holiday Pay on Overtime
Updated November 2026 · Free · No sign-up
Calculate holiday pay with overtime — at least 4 weeks of UK leave must pay "normal remuneration": the 52-week average including regular overtime, commission, and allowances — basic-only holiday pay is the UK’s most common underpayment.
Quick answer: Holiday pay for the 4-week core must include: compulsory OT, regular voluntary OT, commission, shift premiums, and regular allowances — averaged over the last 52 paid weeks (skip unpaid weeks, look back up to 104). Basic salary ÷ 52 is NOT the law for variable earners.
What Must Be Included (The Case-Law Stack)
| Element | Included? | Authority |
|---|---|---|
| Compulsory/guaranteed OT | Yes | Bear Scotland |
| Regular voluntary OT | Yes — when sufficiently regular to be "normal" | Flowers, Dudley MBC |
| Commission | Yes | Lock v British Gas |
| Shift/night premiums, standby allowances | Yes when regular | Williams line |
| Truly occasional one-off OT | No | — |
Strictly these rules attach to the 4-week core (the 1.6 UK weeks may pay basic) — but two-rate systems are admin pain, so most compliant employers apply the 52-week average to all 5.6. The reference period: 52 paid weeks, skipping zero-pay weeks, reaching back max 104.
Worked Example
£520 basic + £85 average OT + £40 commission = £645 "normal pay" — each holiday week underpays by £125 on basic-only. 5.6 weeks/year = £700/yr claimable, chainable as unlawful deductions (3-month deadline from the LAST underpayment, 2-year backstop — and gaps over 3 months between underpayments break the chain).
How To Claim
Compare payslips for leave weeks vs your 52-week average; raise it internally (many fix on challenge); then ACAS early conciliation → tribunal within 3 months of the last underpaid holiday. Zero-hours/irregular workers: the 12.07% scheme runs on total pay, same inclusion rules. Employers: the audit-now option is cheaper than the class-action version.
Frequently Asked Questions
Does overtime count in holiday pay?
Yes — compulsory OT and regular voluntary OT must enter at least the 4-week core’s rate via the 52-week average; basic-only holiday pay underpays variable earners.
Does commission count?
Yes — Lock v British Gas settled it; results-based pay patterns belong in normal remuneration.
What is the 52-week reference period?
The last 52 weeks with pay (unpaid weeks skipped), looking back up to 104 weeks — average weekly earnings across them price each leave week.
How far back can I claim?
Unlawful-deduction chains reach back up to 2 years, broken by 3-month gaps between underpayments — claim within 3 months of the most recent one.
Do all 5.6 weeks include overtime?
Legally the 4-week core must; the 1.6 UK weeks may pay basic — though most employers apply one rate to all for sanity.
✓ Formula verified • Last updated: November 3, 2026