What happens to my unused holiday when I leave a job?
Untaken statutory holiday is paid on leaving. Holiday taken but not yet earned can be clawed back, but only if the contract says so — which is the half people miss.
- Difficulty
- beginner
- Time
- 10 min
- Read
- 2 min
Short answer
You are paid for statutory holiday you accrued but did not take, pro-rated to the part of the leave year you worked. If you took more than you had accrued, your employer can only recover it from your final pay if the contract expressly allows the deduction. Check your leave year start date first — it decides the whole calculation.
Step by step
- Find the leave year start date.It is in the contract or the handbook, and it is frequently the anniversary of your start date or the start of the company's financial year rather than 1 January. Everything else depends on it.
- Work out accrued entitlement to your leaving date.Full-year entitlement, multiplied by the proportion of the leave year you were employed. If your entitlement is 28 days and you leave a quarter of the way through, you accrued seven.
- Subtract what you have already taken.A positive number is owed to you as pay in lieu. A negative number means you are over-taken.
- Check the contract before accepting a deduction.An employer can only deduct over-taken holiday from final pay if there is an express written term allowing it. Without one, the deduction is an unlawful deduction from wages. This is one of the most commonly missed points in a final payslip.
- Check the rate the pay in lieu was calculated at.It should be a normal week's pay, worked out the same way as holiday pay generally. For variable hours that means the averaged rate, not basic.
- Deal with holiday during a notice period separately.Your employer can require you to take holiday during notice, with the usual counter-notice. That is a different thing from being paid in lieu, and it is common where notice is being worked out at home.
- Query it before the P45 arrives if you can.Final pay errors are much easier to correct while the payroll record is still open. Ask for the calculation in writing.
Questions people ask
Can my employer refuse to pay for holiday I did not take?
Not for statutory holiday accrued in the leave year you leave in. Contractual holiday above the statutory minimum can be treated differently if the contract says so, and holiday carried over from earlier years may be excluded.
Can they take money back for holiday I had already used?
Only if there is an express written term in your contract permitting the deduction. Without one, deducting it from final pay is unlawful.
Do I get paid for bank holidays I have not had yet?
Only if they form part of your entitlement rather than being given on top of it. If the contract gives "20 days plus bank holidays", the bank holidays are usually treated separately and are not accrued in the same way.