Holiday pay when leaving a job: what goes in your final pay

When your job ends, any statutory holiday you have built up but not taken must be paid to you. It is the only time the law allows holiday to be swapped for cash, and it applies however you leave: resignation, redundancy, the end of a fixed-term contract or dismissal, including dismissal for gross misconduct.

Mistakes in final pay are common. Here is how to check yours.

Step 1: work out what you have accrued

Your statutory entitlement is 5.6 weeks a year (28 days for a five-day week). If you leave part-way through your leave year, you are entitled to a proportion based on how much of the year you worked.

Worked example: you work five days a week, your leave year runs January to December, and you leave on 30 June. You have worked half the year, so you have accrued 28 x 0.5 = 14 days. If you have taken 8 days, you are owed 6 days' pay.

If you work irregular hours under the post-April 2024 rules, your accrual is 12.07% of the hours you actually worked, so count the hours, not the calendar. Our holiday pay entitlement guide covers both methods in more detail.

Your contract may give you more than the statutory minimum. Whether you are paid for extra contractual holiday on leaving depends on the wording of your contract, so check it.

Step 2: work out the daily rate

The payment should reflect what you would have been paid for taking that leave. For the first four weeks of statutory leave, that is your normal pay, including regular overtime and commission, averaged over the previous 52 paid weeks if your pay varies.

Worked example: you earn £32,500 a year basic plus around £2,600 a year regular overtime, working five days a week. A common approach is to divide annual pay by working days: £35,100 / 260 = £135 a day. Six days owed = £810, before tax.

Employers sometimes divide by 365 calendar days instead of working days. That produces a much lower daily rate (£96.16 in this example) and usually underpays you.

Can your employer make you take holiday during notice?

Yes, with the right notice. Unless your contract says otherwise, your employer can tell you to take holiday on specific days if they give you notice of at least twice the length of the leave. So to make you take five days, they must tell you at least ten days in advance.

This is common when someone is put on garden leave or works out a redundancy notice period. Holiday you take during notice is then not paid again at the end.

If you are paid in lieu of notice instead, holiday continues to accrue only up to your termination date, so your final pay should include accrued but untaken leave up to that date.

Can they deduct holiday you have overtaken?

If you have taken more holiday than you have accrued, your employer can only claw it back from your final pay if there is a written agreement allowing it, usually a clause in your contract. Without one, the deduction may be unlawful.

Gross misconduct does not cancel holiday pay

Some employers still tell staff dismissed for gross misconduct that they forfeit holiday pay. For statutory leave, that is wrong. GOV.UK guidance is clear that untaken statutory leave must be paid even after a gross misconduct dismissal. See our guide on gross misconduct for the wider picture.

What if it is missing or wrong?

Missing holiday pay in your final payslip is usually a claim for unlawful deduction from wages, or can be brought under the Working Time Regulations.

• Ask for a breakdown of how your final pay was calculated. Since April 2026 employers must keep holiday records for six years.
• Put it in writing and give a short deadline to pay.
• Note the time limit. For underpayments on or after 1 October 2026 the tribunal deadline is six months; older events may still be under the previous three-month limit. You must go through ACAS early conciliation first.

If you are also negotiating a settlement agreement, make sure accrued holiday is listed separately and paid in full: it should not be quietly folded into the compensation figure.

Get your final pay checked

If your final pay looks short, or your exit is part of a wider dispute, an employment solicitor can check the sums and advise on next steps. Tell us about your situation and Match My Solicitor will connect you with a specialist for free.