When you leave a job, there are a few things you’ll need to wrap up:
- Handing in your notice
- Finishing up tasks
- and maybe even saying goodbye to colleagues
But what about any holiday you haven’t used? Are you entitled to be paid for it? In the UK, the answer is generally yes. In this post, we’ll break down exactly what happens with your unused holiday when you leave a job, and how your employer is required to handle it.
Understanding Holiday Entitlement in the UK
Before we dive into what happens when you leave, it’s helpful to understand how holiday entitlement works in the UK. Under the Working Time Regulations, most full-time employees are entitled to 5.6 weeks of paid holiday per year. This includes public holidays, but if your company gives extra days off on top, those are usually written into your contract.
For part-time employees, your entitlement is calculated on a pro-rata basis. So, if you work three days a week, you’ll be entitled to 16.8 days of paid holiday a year (5.6 weeks x 3 days).
It’s also worth checking your employment contract, as some companies offer additional days off, but 5.6 weeks is the minimum legal entitlement in the UK.
What Happens to Unused Holiday When You Leave Your Job?
If you haven’t used up all your holiday entitlement when you leave, you’re in luck. In the UK, you’re legally entitled to be paid for any unused statutory holiday. This payment is called “payment in lieu of holiday”, and it’s required by law regardless of whether you’ve resigned or been dismissed.
Employers can’t take away your right to this payment, and it’s usually included in your final payslip. If you’ve built up holiday but haven’t had the chance to use it before your final day, your employer must compensate you for the days you’ve missed out on.
How Is Payment for Unused Holiday Calculated?
The amount you’ll be paid for your unused holiday is based on how much of the leave year you’ve worked before leaving. The calculation is pro-rata, meaning you’ll get paid for any holiday you’ve accrued but haven’t taken.
Here’s an example:
- Let’s say you’re entitled to 28 days of holiday a year.
- If you leave halfway through the year, you’re entitled to 14 days of holiday (half of 28 days).
- If you’ve only taken 10 days off by the time you leave, you’ll be owed for the 4 remaining days.
Some contracts may give you more holiday than the statutory minimum. If so, any additional days will be dealt with according to your specific employment contract. It’s worth double-checking the terms, as these extra days may not always be paid out.
Is There a Deadline for Receiving This Payment?
Employers should include payment for any unused holiday in your final payslip. This is usually processed on your last working day, or at the end of your notice period. If there’s a delay, or you don’t receive the full amount you’re expecting, your first step should be to raise the issue with your employer. Most companies will sort this out fairly quickly.
If your employer doesn’t pay what’s owed or disputes your entitlement, you can raise a formal grievance. If the issue remains unresolved, the next step would be to contact ACAS (Advisory, Conciliation and Arbitration Service) for advice or consider taking the matter to an employment tribunal.
What About Accrued but Unused Holiday from Previous Years?
In some cases, you might have holiday carried over from a previous year, particularly if you’ve been on long-term sick leave or maternity leave. In these situations, your employer is still required to pay you for the accrued leave that you’ve carried over, as long as it falls within your legal entitlement.
However, if you’ve chosen to carry over extra holiday outside of statutory requirements (for instance, if it’s part of a special agreement with your employer), this may depend on the terms of your contract.
Can an Employer Refuse to Pay for Unused Holiday?
In the UK, your right to be paid for unused statutory holiday is protected by law, so an employer can’t simply refuse to pay. That said, if there’s a disagreement about how much you’re owed, it’s important to review your contract and discuss the situation with your employer.
If the issue persists and you believe your employer is withholding money you’re entitled to, ACAS can offer free advice, or you can pursue the matter through an employment tribunal.
Special Considerations for Different Employment Types
If you’re a part-time worker, the same rules apply, but your holiday entitlement will be pro-rated based on the number of days or hours you work. For zero-hours contracts, you’re still entitled to holiday, but your pay for unused holiday will be calculated based on the average hours you’ve worked.
If you’re a freelancer or self-employed, things are a bit different. You generally won’t have the same legal right to holiday pay, unless you have a contract that states otherwise.
Can You Use Your Holiday Instead of Being Paid for It?
Some employees prefer to take their holiday during their notice period, rather than receiving a payment for it. If that’s your choice, you’ll need to discuss it with your employer. In many cases, employers are happy to allow this, but they may request you work your notice and take payment instead.
It’s also possible for employers to request that you use up your remaining holiday before you leave, but they can’t force you to do this unless they give you proper notice (which is usually twice the length of the holiday they want you to take).
FAQs
What if I leave before the holiday year ends?
You’ll be paid for any holiday you’ve accrued up to the point of leaving.
Can I take holiday during my notice period?
Yes, but it will depend on your employer’s agreement. Alternatively, you can be paid for any remaining holiday.
What happens if I have taken more holiday than I have accrued?
If you’ve taken more holiday than you’ve earned, your employer may deduct the extra days from your final pay.
By understanding your rights, you can ensure you receive what you’re owed when you move on to your next adventure!
Final Thoughts
To sum up, if you’re leaving your job in the UK, you’re entitled to be paid for any unused holiday. This is called payment in lieu of holiday, and it’s a legal requirement under UK law. Make sure you check your final payslip to ensure everything has been calculated correctly, and if there’s a problem, don’t hesitate to raise it with your employer.
