Holiday pay when you leave a job : penalty rates and the amount owed

• On termination, if you have taken less than the share of statutory leave you have built up for the leave year so far, your employer must usually pay in lieu of the unused days (Working Time Regulations regulation 14).
• Statutory leave is normally 5.6 weeks a year (28 days if you work 5 days a week). Accrual is proportional to how much of the leave year has passed, unless your pattern uses the irregular-hours / part-year rules.
• Use the GOV.UK holiday entitlement calculator when the job started or finished part way through the leave year.
• Contractual "extra" holiday may have its own leaving rules. Statutory leave still has the regulation 14 floor.
• Most tribunal pay claims today: 3 months minus 1 day. From 1 October 2026, most claims become 6 months minus 1 day if the clock starts on or after that date. Grievance alone does not pause the clock.

Payment in lieu here means money instead of time off. You cannot take the leave after the job has ended, so the employer pays holiday pay for the unused accrued statutory entitlement.

Acas is direct: employers must pay workers in lieu for any untaken statutory holiday entitlement they have accrued when they leave. GOV.UK's holiday entitlement guide confirms almost all workers (including many agency, irregular-hours, and part-year workers) get paid statutory annual leave, and the calculator page is built to handle jobs that finish part way through a leave year.

If you took more leave than you had accrued, the employer may be able to recover the excess from final pay only if that was agreed in the contract or in writing beforehand (Acas final-pay guidance).

Regulation 14 of the Working Time Regulations 1998 applies where employment ends during the leave year and the proportion of leave taken differs from the proportion of the leave year that has expired.

In the usual under-taken case, the employer must pay a sum. If a relevant agreement (often the contract or a workforce agreement) sets the payment method for this purpose, that can apply. Otherwise the Regulations use a formula that compares:

• A: your statutory leave entitlement for the leave year (under the main annual leave rules, including the additional leave that brings most workers to 5.6 weeks)
• B: the proportion of the leave year that expired before the termination date
• C: leave already taken between the start of the leave year and termination

In substance you are owed pay for roughly (A × B) − C days (or the equivalent in hours), valued as holiday pay under the usual holiday-pay rules.

From January 2024 updates, regulation 14 also covers payment in lieu where leave carried forward from a previous leave year under the specific carry-forward rules is still unused at termination.

You do not need to recite the SI number to your payroll team. You do need the leave year dates, days (or hours) taken, and a clear ask for the balance in pounds on the final payslip.

Assume:

• You work 5 days a week
• Statutory entitlement for a full leave year: 28 days (5 × 5.6)
• Leave year runs 1 April to 31 March
• You leave on 30 September (half the leave year has expired, so B = 0.5)
• You have already taken 5 days of leave (C = 5)
• Your holiday pay rate for illustration is £120 a day (for example a £600 weekly salary divided by 5)

Accrued leave by termination: 28 × 0.5 = 14 days.

Unused accrued leave: 14 − 5 = 9 days.

Payment in lieu (gross, before tax and NI): 9 × £120 = £1,080.

If your final payslip shows £0 for holiday, that £1,080 is the shortfall to raise in writing.

Exact figures move if your leave year started on a different date, if Easter or other closures ate into leave, or if your contract grants more than 28 days. The calculator on GOV.UK is safer than a napkin when the dates are messy.

Part-time illustration

Same leave year and exit date. You work 3 days a week. Full-year statutory leave: 3 × 5.6 = 16.8 days. Half-year accrual: 8.4 days. If you took 2 days, unused accrued leave is about 6.4 days. At £120 a day that is about £768 gross. Employers must not round part days down; Acas notes that in the first year they must round part days up to the nearest half day.

If your paid hours change a lot each pay period, or you only work part of the year, GOV.UK says you still get up to 5.6 weeks of statutory leave, but you often accrue it from hours already worked rather than sitting on a fixed 28-day pot from day one.

For leave years beginning on or after 1 April 2024, many irregular-hours and part-year workers accrue at 12.07% of hours worked in the pay period. Some employers use rolled-up holiday pay (extra, itemised, on top of pay for work). If holiday was already paid lawfully via rolled-up pay for those hours, you should not expect a second full payment for the same entitlement. If rolled-up pay was missing, understated, or mixed into a single rate so that pay for work alone fell below the National Minimum Wage, that is a different underpayment problem.

When you leave, you still need a clear picture of accrued untaken leave (or unpaid rolled-up amounts). Use the GOV.UK calculator for accrual over a pay period and for jobs that end mid year. Do not rely on a manager's "zero hours means no holiday on exit" line: status as a worker or employee is what matters.

NMW check: from 1 April 2026, the National Living Wage for age 21+ is £12.71 an hour. Holiday pay must not be used as a top-up to disguise work pay below that floor. Hours you actually worked in the notice period still need at least £12.71 where NLW applies, separate from any payment in lieu of leave.

Many contracts give more than 5.6 weeks. Acas calls this enhanced or contractual holiday. Check the contract for what happens to those extra days when you leave. Some schemes pay them out; some do not; some need a minimum service period.

Statutory leave under regulation 14 is the floor. Enhanced leave is whatever the contract (and any lawful custom) says. When you write to payroll, split the ask: statutory days first, then any contractual extras.

1. List the numbers: leave year start, termination date, full-year entitlement, days or hours taken, your daily or hourly holiday rate, and the pounds you think are missing.
2. Gather evidence: contract or written statement, leave portal screenshots, approved leave emails, payslips, final pay breakdown, rota or timesheets.
3. Write to payroll or HR before or just after the final payday. Ask for payment in lieu under the Working Time Regulations and quote the unused accrued days.
4. Grievance if needed. Keep copies. Remember: a grievance does not stop the tribunal clock by itself.
5. Acas Early Conciliation, then an employment tribunal claim if the money stays unpaid.

Tribunal time limits (dual regime): for most pay-related claims in September 2026 you usually have 3 months minus 1 day from the relevant date (often the date final pay should have included the holiday money). From 1 October 2026, most claims become 6 months minus 1 day if the time limit starts on or after that date. Notify Acas in time so Early Conciliation can pause the clock.

• "Unused holiday dies when you resign." Statutory accrued leave is normally paid in lieu on termination.
• Counting bank holidays as always extra. Employers can include bank holidays inside the 5.6 weeks. That affects how many "ordinary" days you still have left, not whether regulation 14 applies.
• Ignoring rolled-up holiday. If you were paid lawful rolled-up holiday on irregular hours, you may already have received holiday pay for those hours. Check payslip lines before claiming twice.
• Letting HR net off "overtaken" leave without a written agreement. Acas says deductions for excess holiday need prior agreement in the contract or in writing.
• Waiting for a "final holiday review" while the Acas / tribunal deadline runs.
• Mixing notice pay disputes with holiday. Both can appear on the same payslip. Argue each clearly.

Exit holiday disputes are easier when the days and pounds are written down before the first heated email. Paye Mes Heures can help you estimate accrued leave pay and prepare a short dossier (leave year, days taken, rate, final payslip gap) before you contact your employer or Acas. It is a preparation aid, not a tribunal decision and not a substitute for the GOV.UK calculator or Acas advice on your facts.

Leaving a job ends the rota. It does not wipe the holiday you already earned. If the final payslip forgot those days, ask for the money in clear, dated pounds.

• GOV.UK - Holiday entitlement rights: https://www.gov.uk/holiday-entitlement-rights
• GOV.UK - Calculate your holiday entitlement: https://www.gov.uk/calculate-your-holiday-entitlement
• Working Time Regulations 1998, regulation 14: https://www.legislation.gov.uk/uksi/1998/1833/regulation/14
• Acas - Checking holiday entitlement: https://www.acas.org.uk/checking-holiday-entitlement
• Acas - Holidays and final pay: https://www.acas.org.uk/final-pay-when-someone-leaves-a-job/how-holidays-affect-final-pay
• GOV.UK - National Minimum Wage rates: https://www.gov.uk/national-minimum-wage-rates
• Acas - Employment tribunal time limits: https://www.acas.org.uk/employment-tribunal-time-limits