Holiday
Rolled-up holiday pay: the uplift paid with your wages
Instead of paying you when you take time off, your employer may add holiday pay to every payslip. The law allows it for some workers only, and on strict conditions.
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Rolled-up holiday pay means paying holiday pay as an uplift on wages instead of paying it when the leave is taken. Regulation 16A of the Working Time Regulations 1998 allows it in Great Britain only for irregular-hours and part-year workers, for leave years beginning on or after 1 April 2024. The uplift is 12.07 % of the pay for work done in the period, counting everything that would go into a week’s holiday pay, so regular overtime and commission are uplifted too. It must be paid at the same time as the wages it relates to and shown as a separate amount on the payslip. During sick leave or statutory leave it continues as the average holiday pay of the previous 52 weeks. Paying it discharges the employer, so the time off is later taken unpaid. Workers on regular hours cannot be paid this way, and Northern Ireland does not allow it. If rolled-up pay that was due is not paid, GOV.UK says the whole entitlement can be carried over.
Rolled-up holiday pay on your payslip
Holiday pay line (12.07 %)
£147.25
| Total for the period, work plus holiday pay | £1,367.25 |
| Hours of leave accrued this period | 12 hours |
| Holiday pay over a year (12 such periods) | £1,767 |
Great Britain only, irregular-hours and part-year workers, leave years from 1 April 2024.
Who can be paid this way
Only workers whose leave is calculated under regulation 15B: irregular-hours workers, whose paid hours are wholly or mostly variable under their contract, and part-year workers, who have unpaid weeks off each year. The rules start with the first leave year beginning on or after 1 April 2024. Before that, and for anyone on regular hours today, rolled-up pay is not allowed: GOV.UK says an employer cannot include an amount for holiday pay in the hourly rate of a regular-hours worker, full-time or part-time (GOV.UK, Holiday entitlement). An employer who has a mix of staff can therefore use it for the casual pool and not for the contracted team.
The three conditions in regulation 16A
- The rate: 12.07 % of the worker’s remuneration for work done, where remuneration means every kind of payment included in a week’s pay for holiday purposes (regulation 16A(2) and (9)).
- The timing: paid at the same time as the pay for the work it relates to (regulation 16A(3)). Holding it back to a later month, or paying it only at the end of a contract, does not satisfy the rule.
- The payslip: the itemised pay statement must show the amount of holiday pay paid for the period (regulation 16A(7)).
What a correct payslip looks like
A care worker on a zero-hours contract works 82 hours in September at £13.50 an hour and is paid £113 of regular overtime premium. The holiday pay line is calculated on both, as regulation 16A(9) requires.
| Payslip line | Amount |
|---|---|
| Basic pay, 82 hours × £13.50 | £1,107.00 |
| Overtime premium | £113.00 |
| Holiday pay, 12.07 % of £1,220.00 | £147.25 |
| Gross pay for the month | £1,367.25 |
The same month also adds 10 hours to the worker’s leave balance (82 × 12.07 % = 9.90, rounded to the nearest hour). Rolled-up pay changes when holiday is paid, not how much leave is built up.
Sick leave, maternity and other statutory leave
A worker who was paid rolled-up holiday pay before going on sick leave or statutory leave must keep receiving it during that leave, but the amount changes. Instead of 12.07 % of pay for work done, which would be nothing, each pay period carries the average holiday pay paid per period over the 52 weeks before the leave started (regulation 16A(4) to (6)). If the worker had been paid this way for less than 52 complete weeks, the shorter period is used. For the care worker above, twelve earlier payslips with holiday pay lines ranging from £119.60 to £162.90 give £142.12 for each month of sick leave.
Taking the time off
Because the money has already been paid, regulation 16A(8) discharges the employer from paying again when the leave is taken. The leave itself does not disappear: it builds up at 12.07 % of hours worked, it can be booked with the normal notice, and the employer must still let you take it. Over a year the sums are not small. Someone earning £640 a fortnight receives £2,008 of rolled-up holiday pay across 26 payslips, which is the pay for the weeks they will spend on holiday.
When the rules are broken
Regulation 15D(5) and (6) let a worker carry forward all of their leave, untaken or taken but not paid, where the employer failed to recognise the right to pay for it. GOV.UK puts it simply: a worker can carry over their whole leave entitlement if they did not receive rolled-up holiday pay they were entitled to (carrying over holiday). That leave can be carried until the end of the first full leave year in which the failure no longer applies. On leaving, regulation 15E requires payment in lieu of accrued leave not taken, except leave already paid through a valid uplift.
Northern Ireland
None of this applies in Northern Ireland, where SI 2023/1426 does not extend. nidirect is explicit that holiday pay should be paid for the time when the holiday is taken, that an employer cannot include an amount for holiday pay in the hourly rate, and that a contract which still does so should be renegotiated (nidirect, Taking your holidays).