Holiday pay ― legal points

Produced by Tolley in association with

Employment Tax

Guidance

The right to be paid for holidays is a statutory entitlement and there may also be a further contractual entitlement. Almost all workers are entitled to 5.6 weeks paid holiday per year (which can include bank holidays). Self-employed workers have no statutory leave entitlement.

ACAS provides guidance on all elements of holiday, sickness and leave.

Statutory holiday pay

The Working Time Regulations 1998 entitle a worker to be paid:

•
during his statutory holiday, entitlement of 5.6 weeks a year
•
in lieu of any statutory holiday entitlement accrued but unused on termination of his employment

This does not prevent an employer offering a more generous annual paid leave entitlement as part of a contract of employment.

Calculating statutory holiday pay

During any period of statutory holiday, a worker is entitled to be paid at the rate of a week’s pay for each week of holiday.

The Employment Rights Act sets out the method of calculating a week’s pay except that references to ‘employee’ in the ERA 1996 should be read as ‘worker’

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Sarah Bradford

Director at Writetax Ltd

Sarah Bradford BA(Hons), ACA, CTA (Fellow) is the director of Writetax Ltd, a company providing tax technical writing services on tax and National Insurance, and also of its sister company, Writetax Consultancy Services Ltd. Sarah writes widely on tax and National Insurance and is the author of several books.

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