Do You Get Paid for Unused Holiday When You Leave?

Leaving a job brings a rush of practicalities—handing over work, collecting your belongings, and crucially, making sure you receive everything you’re owed in your final pay. One question that comes up constantly is whether you’re entitled to payment for those holiday days you never got around to taking.

This guide breaks down exactly how unused holiday pay works in the UK, how to calculate what you’re owed, and what to do if your employer doesn’t pay up.

Quick Answer: Are You Entitled to Pay for Unused Holiday When You Leave a Job?

Yes, in the UK you must usually be paid for any accrued but untaken statutory holiday when your employment ends, regardless of whether you resign, are made redundant, or are dismissed (including for gross misconduct). This payment is called “pay in lieu of holiday” or “payment in lieu” of untaken annual leave and must be included in your final pay.

This rule covers the statutory 5.6 weeks’ paid leave per year (typically 28 days for full time employees) under the Working Time Regulations 1998. Any extra contractual holiday above this statutory minimum depends entirely on what your employment contract says—some employers pay out enhanced holiday, others don’t.

One important caveat: if you’ve taken more holiday than you had accrued by your leaving date, your employer can usually deduct money from your final pay for those overused days. However, this is only lawful if there’s a written agreement allowing it—for example, in your contract or staff handbook.

What Is Unused Holiday Pay When You Leave an Employer?

UK workers build up (accrue) paid holiday from day one of employment. When you leave before using all your accrued entitlement, that unused holiday converts into cash instead of time off. This is your unused holiday pay.

Here’s what you need to understand about how holiday entitlement works:

• Statutory holiday entitlement is 5.6 weeks per leave year. For someone working 5 days a week, this equals 28 days. This can include bank holidays if your contract says so, or bank holidays might be on top of your basic annual leave entitlement.
• A leave year is the 12-month period used for tracking holiday. Common examples include 1 January to 31 December, 1 April to 31 March, or a year running from your start date. Your contract should specify which applies.
• Most employees and workers—including many agency and zero-hours workers—are legally entitled to paid annual leave. Holiday continues to accrue during certain absences such as maternity leave, parental leave, or long-term sick leave.
• Unused holiday pay at termination is different from “buying back” holiday mid-year. During employment, payment instead of taking holiday is generally not allowed if it would reduce your leave below the statutory minimum.
• Contractual policies (such as enhanced holiday allowance or “buy/sell” schemes) can sit on top of the statutory framework but cannot undercut your legal minimum rights. Any contractual holiday above statutory levels follows the rules in your contract.

How Does Holiday Pay Work When You Leave a Job in the UK?

Your final payslip when leaving a job should include several elements: wages up to your leaving date, notice pay or pay in lieu of notice (if applicable), redundancy pay (if applicable), and a separate line for unused holiday pay.

Here’s how the process typically works:

• Your employer must calculate how much holiday you’ve accrued up to your termination date, including any statutory or contractual notice period (whether worked or paid in lieu).
• They compare your accrued holidays with the holiday already taken in the current leave year.
• Any positive balance must be paid as holiday pay and appears as “holiday pay”, “accrued leave” or similar on your last pay packet. You’re entitled to receive a written itemised payslip showing this breakdown.
• If you’ve taken more holiday than you’ve accrued, and there’s a written right to deduct in your contract, your employer can lawfully deduct the value of those excess days from final pay. Without such a clause, making deductions is risky and potentially unlawful.
• The reason for leaving—resignation, redundancy, dismissal, or end of a fixed-term contract—does not remove your right to be paid for accrued statutory holiday.
• Timing: unused holiday pay is usually paid in the normal payroll cycle covering your final working day, but employers should confirm the exact date in writing.

How to Calculate How Much Unused Holiday You Should Be Paid

Holiday accrues gradually across the leave year. The basic calculation is straightforward: holiday you’ve accrued up to your leaving date minus holiday you’ve already taken.

Here’s a simple formula for staff with regular hours:

• Accrued entitlement = (Annual holiday entitlement in days ÷ 12) × number of complete months worked in the current leave year
• Alternative method: Accrued entitlement = Annual entitlement × (number of days or weeks employed in the leave year ÷ total days or weeks in the leave year)

Worked example 1: Owed money for unused holidays

An employee with 28 days’ annual leave entitlement leaves on 30 June, halfway through a holiday year running 1 January to 31 December.

• Accrued leave: 28 ÷ 2 = 14 days
• Holiday taken: 8 days
• Unused entitlement: 14 – 8 = 6 days

The employee should be paid for 6 unused days of holiday.

Worked example 2: Overtaken holiday

Same employee, but they’ve taken 18 days by 30 June.

• Accrued leave: 14 days
• Holiday taken: 18 days
• Overtaken: 4 days

Subject to a contractual right to deduct, the employer could deduct 4 days’ holiday pay from final wages.

Calculating the daily rate:

• For salaried staff with fixed hours: weekly pay ÷ number of days worked per week. For example, £600 a week ÷ 5 days = £120 per day.
• For staff with variable pay (overtime, commission, irregular hours): use average pay over a reference period—typically the previous 52 paid weeks, ignoring weeks with no pay.

For complex patterns like shift work, compressed hours, or term-time only contracts, use the official GOV.UK holiday entitlement calculator, ACAS guidance, or our guide to calculate legal holiday entitlement. Keep your own records of days taken so you can verify any figure your employer provides.

Do You Get Paid for Unused Holiday If You’re Sacked, Made Redundant, or Leave Without Notice?

The right to be paid for accrued statutory holiday on termination generally does not depend on how your employment ends. Here’s how it works in common scenarios:

Resignation with notice

Holiday accrues up to your last working day. You might choose to use up remaining holiday during your notice period, or you’ll be paid for any remaining balance in your final pay. Some employers require you to take accrued holidays during notice, while others pay it out—check your contract for the rules.

Redundancy

Redundancy pay is calculated separately from holiday pay. Your statutory annual leave entitlement still accrues up to your termination date and must be paid or taken, in addition to any statutory or contractual redundancy pay you receive. These are two distinct payments.

Dismissal (including gross misconduct)

Even if you’re dismissed without notice for gross misconduct, you must still be paid for accrued but untaken statutory holiday up to the date your employment ends. This is a legal minimum that cannot be forfeited regardless of the circumstances of your dismissal.

Leaving without working your notice

If you walk out or mutually agree an earlier leaving date, your right to accrued holiday pay remains intact. However, you won’t be paid for the unworked notice period unless there’s a specific agreement to the contrary.

For all scenarios, remember:

• Your employer’s ability to deduct for overtaken holiday is limited to situations where there’s clear written permission in your contract or staff handbook.
• Deductions must not take your pay below the National Minimum Wage for hours worked.
• Enhanced holiday above the statutory 5.6 weeks is only payable on termination if your contract, staff handbook, or collective agreement says so.

For example, if your contract offers 33 days’ holiday but states that pay in lieu only applies to statutory entitlement, you might only receive payment for unused statutory leave (up to 28 days for a full-time worker), not the extra 5 contractual days.

Part-Time, Irregular Hours and Zero-Hours Workers: How Unused Holiday Pay Works

Part-time and irregular hours workers have the same rights to paid leave and to payment for unused holiday on leaving as full-time employees. The key difference is that entitlement is pro-rated based on your working pattern.

Part-time staff with fixed days

If you work 3 days per week, your statutory annual leave entitlement is:

3 days × 5.6 weeks = 16.8 days per year

If you leave after 9 months of a 12-month leave year:

9 ÷ 12 × 16.8 = 12.6 days accrued

Subtract any holiday already taken to find your unused leave entitlement.

Zero-hours and casual workers

The 12.07% method is commonly used for expressing holiday accrual:

Holiday hours = total hours worked × 12.07%

Example: A casual worker has worked 300 hours in the current annual leave year before their contract ends.

• Holiday accrued: 300 × 12.07% = 36.2 hours
• Holiday taken: 10 hours
• Unused holiday pay owed: 26.2 hours at their average hourly rate

Note that government guidance on holiday calculations may be updated, so employers and workers should check current rules each tax year.

Variable pay considerations

For workers with variable pay, the reference-period averaging method (typically 52 paid weeks) determines the correct hourly or daily rate for holiday pay. This includes regular overtime and commission that forms part of normal remuneration.

Agency and umbrella workers

Agency workers and umbrella company employees may have their holiday pay “rolled up” (included in their hourly rate) or paid separately. On termination, you must still receive payment for any unused statutory holiday entitlement not yet paid out. Check your payslips carefully to see whether holiday pay has already been included in each pay period—if so, you may have already received it.

Deadlines, Disputes and What to Do If You Are Not Paid for Unused Holiday

Unused holiday pay should appear in your final payslip, but mistakes happen. If you believe you’ve been underpaid, there are strict time limits for taking action.

Step 1: Check your final payslip carefully

Confirm that all elements are listed:

• Wages for hours worked up to your leaving date
• Holiday pay for accrued holidays
• Notice pay (if applicable)
• Redundancy pay (if applicable)

Look for any unexpected deductions and query anything missing with your former employer’s HR or payroll team in writing.

Step 2: Raise the issue formally

If informal contact doesn’t resolve the problem, write a detailed letter setting out:

• Your termination date
• The amount of unused annual leave you believe is owed
• How you calculated this figure
• Supporting evidence (your contract, holiday records, payslips)

If you’re still employed when the dispute arises, you can raise a formal grievance under your employer’s grievance procedure.

Step 3: Start ACAS early conciliation

For most unlawful deduction from wages or holiday pay claims, you must start the ACAS early conciliation process. The deadline is 3 months minus one day from the date the payment should have been made (typically your final pay date).

ACAS will try to help both sides reach an agreement without going to tribunal. This step is mandatory before most Employment Tribunal claims.

Step 4: Employment Tribunal claim

If conciliation fails or time limits are approaching, you may bring a claim in the Employment Tribunal. This usually must be done within 1 month of receiving the ACAS early conciliation certificate.

Consider taking advice from:

• Citizens Advice
• Your trade union (if you’re a member)
• An employment solicitor

For employers: Resolving holiday pay disputes early benefits everyone. Clearly itemise final pay, be transparent about calculations, and correct errors quickly. This approach avoids tribunal claims and maintains good relationships with departing staff.

Understanding your holiday pay rights helps ensure you receive everything you’re legally entitled to when leaving a job. Whether you’re resigning, being made redundant, or facing dismissal under exceptional circumstances, your employer must pay for unused statutory leave.

If something doesn’t look right on your final payslip, don’t delay. Check your employment contract, review your holiday records, and raise concerns promptly—the time limits for legal action are strict, and waiting too long could mean losing your right to claim.