The way you calculate holiday pay for your employees may need to change to allow for recent court judgements indicating a change in legislation will soon follow.

ACAS have detailed guidance on their website (www.acas.org.co.uk) but we have summarised the key points below;

An employee should receive holiday pay based on a week’s normal remuneration, whatever that may be to them, not just on their contracted basic hours (unless that is all they work)

The following payments should now be considered when calculating statutory holiday pay

Guaranteed and non-guaranteed overtime (currently there is no case law suggesting voluntary overtime needs to be taken into account)


                Work-related travel

                Other regular payments (e.g bonuses)

It is suggested that holiday pay for those employees with various payments to be included in the calculation is worked out based on an average of 12 weeks of earnings. These weeks should not include nil paid periods or periods of statutory payment.


Also a reminder that employees are entitled to 5.6 weeks holiday per year in the UK. This must be taken and cannot be paid in lieu. Only holidays provided by the employer above the statutory allowance can be paid in lieu if stipulated in the employment contract.

If you require any further information please do not hesitate to contact our office on 03333 202 409 or 01472 345888.             

Agree? Disagree? Do let Unknown know what you think by commenting below.

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