Employment Cases Update

Calculating holiday pay for workers without fixed hours or pay

Date published: 24/07/2020

New guidance has been published which explains how to calculate statutory holiday pay for workers without fixed hours or fixed rates of pay.

The majority of the UK's workforce are full-time workers on fixed hours and fixed pay. For these workers, typically on a fixed monthly salary, if they take a week's holiday, they will receive the same pay at the end of the month as they normally receive.

The situation becomes more complicated when a worker does not work fixed or regular hours and so does not receive the same amount of pay each week, month or other pay period. In these circumstances an employer should normally look back at a worker's previous 52 paid weeks (known as the holiday pay reference period) to calculate what that worker should be paid for a week's leave. (Note that the holiday pay reference period has changed from 12 weeks to 52 weeks from 6 April 2020.)

This guidance is intended to help employers pay the correct amount of holiday pay for all their workers.

Read the full guidance here.