UK · Notice

Holiday accrual during notice

UK statutory holiday continues to accrue at 5.6 weeks per year pro-rated throughout the notice period. Any accrued but untaken holiday at the effective date of termination must be paid out in the final pay run at basic rate. The employer can require you to take accrued leave during notice.

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The statutory rule

Working Time Regulations 1998 give UK workers 5.6 weeks of statutory paid holiday per year (28 days for a 5-day week). This accrues throughout employment, including during the notice period, until the effective date of termination.

Accrual formula

Holiday accrues at 12.07% of hours worked (5.6 weeks per 46.4 working weeks). For a standard 5-day full-year worker:

  • Annual entitlement: 5.6 weeks = 28 days.
  • Weekly accrual: 28 / 52 = 0.538 days per week.
  • Daily accrual: 28 / 260 (working days) = 0.108 days per working day.

Use the holiday entitlement calculator for the specific figure.

Worked example - monthly-paid employee

Employee has 3 months notice. During the notice period they accrue:

  • 3 months x 5.6 weeks / 12 months = 1.4 weeks = 7 days of statutory holiday.

Plus any accrued but untaken holiday from earlier in the leave year. The total balance at effective date of termination must be either taken or paid.

What happens on the final day

Any accrued but untaken statutory holiday at the effective date of termination must be paid at the ordinary rate of pay (regulation 14 Working Time Regulations). The payment appears as a separate line on the final payslip, taxed as earnings.

Employer can require taking during notice

Regulation 15 Working Time Regulations 1998 allows the employer to require an employee to take annual leave during notice, provided the notice period given is at least twice the length of the leave. Practical:

  • Employer wants employee to take 2 weeks holiday during 4-week notice period.
  • Employer must give at least 4 weeks written notice of the requirement (twice the leave length).
  • Which for a 4-week notice period means the requirement must accompany the notice itself.

Enhanced contractual holiday

Where the contract gives more than 5.6 weeks (many roles give 25-30 days plus bank holidays), the enhanced portion may or may not be paid out at termination depending on contract wording. The statutory 5.6 weeks must always be paid out. Enhanced portions can be forfeited if the contract permits, or paid out if it says so.

Bank holidays

Bank holidays can be counted as part of the 5.6 statutory weeks (28 days total including 8 bank holidays leaves 20 core annual leave days). Where the contract gives 20 days plus bank holidays, that's exactly the statutory minimum. Enhanced contracts give more.

Rolled-up holiday pay for irregular hours

Since April 2024, rolled-up holiday pay (12.07% uplift on each pay period) is lawful for irregular-hours and part-year workers. During notice, the uplift continues to be paid on each payslip. At effective date of termination there is no separate lump-sum payout because holiday was paid as it accrued.

Common issues during notice

  • Holiday refusal. The employer refuses to allow accrued holiday to be taken and refuses to pay it out. Unlawful under regulation 14.
  • Underpayment. The employer pays holiday at basic rate but the ordinary rate includes contractual bonuses or overtime. Case law (particularly British Gas v Lock) requires ordinary pay including regular commission and overtime.
  • Forced take. The employer requires holiday to be taken without the statutory notice period (twice the leave length). Employee can refuse.

Interaction with PILON

Holiday pay is separate from PILON. Accrued holiday must be paid as a separate line, not bundled into the PILON figure. See PILON and holiday pay for the specific interaction.

Useful calculators

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Frequently asked questions

Does holiday accrue during notice?
Yes. Statutory 5.6 weeks per year pro-rated continues to accrue throughout the notice period. Enhanced contractual holiday usually also continues to accrue per the contract wording.
How is accrued holiday paid at the end of employment?
As a separate line on the final payslip, at the ordinary rate of pay (basic plus regular commission and overtime per case law). Taxed as earnings. Regulation 14 Working Time Regulations.
Can the employer make me take holiday during notice?
Yes under Regulation 15 Working Time Regulations 1998, provided they give notice equal to at least twice the length of the leave. For a 2-week holiday requirement, 4 weeks notice; for a 1-week requirement, 2 weeks.
What if my employer refuses to pay accrued holiday?
Unlawful under regulation 14 WTR 1998. Query in writing, then raise a grievance, then bring an unlawful deductions claim at tribunal within 3 months of the last non-payment.
Is holiday pay taxed?
Yes, as earnings through PAYE. Income tax and employee NI deducted in the normal way. Employer NI paid separately by the employer.

Sources and further reading

General information about UK employment law, not legal advice. For your situation, contact ACAS or an employment-law solicitor.