How does rolled-up holiday pay work in the UK?
Rolled-up holiday pay is when an employer spreads your holiday pay over the year by adding a set amount on top of your hourly rate.
This type of holiday pay is currently only relevant for irregular hours workers and part-year workers. This post is about the rules in the UK and provides you with a Rolled-Up Holiday Pay Calculator.
What is rolled-up holiday pay?
In the past, in the UK, the rule was you must get paid for your holiday when you took it. However, for any holiday calculations on or after April 1st 2024, rolled-up holiday pay will be allowed for irregular hours and part-year workers. Employers can choose if they want to use it or not.
Your employer should tell you if they're planning to use rolled-up holiday pay. If you are unsure, just ask. Introducing this change might involve updates to your employment contract. There are procedures your employer must follow if they're changing the terms of your contract.
What is an irregular hours worker?
A worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable.
What is a part-year worker?
A worker is a part-year worker, in relation to a leave year, if, under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid. This includes part-year workers who may have fixed hours, for example, teaching assistants who only work during term time, and who are paid only when working.
Definitions taken from gov.uk.
What should employers do about rolled-up holiday pay?
Decide if you will use rolled-up holiday pay or not. For some employers, it is easier to do this as it can often be difficult to figure out how much holiday each part-year or irregular hours employee is owed. However, it can deter employees from taking holidays and not having enough time off. If you wish to use it, the next step is to check to see if your current software provider caters for rolled-up holiday pay calculations. At StaffSavvy, we will have a rolled-up holiday pay calculator built into the software from April 1st 2024 should employers wish to use it.
What should employees do about rolled-up holiday pay?
Ask your employer if this applies to you and if there will be any changes to your contract or your pay. To see what holiday pay you are entitled to go to the government website.
Rolled-Up Holiday Pay Calculator
See how much extra pay you would get in a pay period if your employer chooses to pay you rolled-up holiday pay. Simply enter the number of hours you worked in a specific pay period and click submit to see an example of how much extra pay that would mean for you.
*The pay period is decided by you depending on how often you get paid.
*This calculator is using the statutory minimum holiday entitlement of 5.6 weeks. Your company may offer more than this.
*The rolled-up holiday pay calculation is rounded up or down to the nearest hour.
*This calculator is a guide using the gov.uk guidance for rolled-up holiday pay calculations and calculations may differ depending on your contract.