Do I get paid for unused holiday entitlement when I leave a job?

Full answer

Unused holiday entitlement is one of the most commonly overlooked elements of a final payslip, and understanding exactly how it should be calculated helps ensure you receive everything you are legally owed when leaving a job. **The basic legal entitlement** Under the Working Time Regulations, employees and workers build up (accrue) their statutory annual leave entitlement (5.6 weeks a year, pro-rated for part-time workers) throughout the leave year, whether that is calculated from the start of the calendar year, the anniversary of when they joined, or a specific leave year set by the employer. When employment ends partway through a leave year, you are entitled to be paid for any of this accrued statutory holiday that you have not yet taken, calculated proportionately based on how much of the leave year has elapsed by your leaving date. **How the pro-rata calculation works** The calculation broadly works out how much holiday you would have accrued by your leaving date (based on the proportion of the leave year that has passed), then compares this against how much holiday you have ACTUALLY taken so far in that leave year -- if you have taken less than you had accrued, you receive a payment for the shortfall; if you had somehow taken MORE than you had actually accrued by that point (for example, front-loading holiday early in the year before leaving shortly afterwards), your employer may be entitled to deduct the value of this excess from your final pay, though this generally requires a specific clause in your employment contract permitting such a deduction. **Contractual holiday above the statutory minimum** Many employers offer MORE than the statutory minimum 5.6 weeks of holiday as a contractual benefit -- whether this additional contractual holiday is also paid out on leaving (pro-rated in the same way) depends on the specific terms of the employment contract, since employers have more flexibility to set their own rules for holiday above the statutory minimum (for example, some contracts specify that only the statutory minimum, not the full contractual entitlement, is paid out on termination, though many employers do simply apply the same pro-rata approach to the full contractual entitlement for simplicity and goodwill). **How the payment is calculated financially** The payment for unused holiday is generally based on a week's pay (calculated using the same principles as holiday pay generally, which for workers with variable pay may involve averaging earnings over a reference period) multiplied by the number of unused days/weeks owed -- this amount is added to your final payslip and is subject to normal Income Tax and National Insurance deductions, exactly as ordinary salary would be, since it is simply delayed payment for holiday you were contractually entitled to but had not yet taken. **What if you are dismissed for gross misconduct** Even an employee dismissed for gross misconduct remains legally entitled to be paid for any statutory holiday accrued but not taken up to their dismissal date -- this specific entitlement to accrued statutory holiday pay cannot be withheld as a form of penalty for the misconduct itself, since it represents holiday genuinely earned through work already performed, separate from any other consequences of the dismissal. **Worked example** An employee with a leave year running from 1 January to 31 December, entitled to 25 days' holiday a year (above the statutory minimum), resigns with their employment ending on 30 June (exactly half the leave year). By this point, they have accrued approximately 12.5 days of holiday (half of their 25-day annual entitlement) but have only actually taken 8 days so far that year -- they are entitled to be paid for the remaining 4.5 days of accrued but untaken holiday in their final pay. If they had instead already taken 15 days by their leaving date (more than the 12.5 days accrued), their employer might be entitled (if their contract permits it) to deduct the value of the 2.5 days' excess holiday from their final pay instead. **Practical tip** Before leaving a job, calculate your own accrued but untaken holiday entitlement (based on your specific leave year and how much you have already taken) and check this matches what appears on your final payslip, raising any discrepancy with your employer's HR or payroll team promptly, since this is a legal entitlement that should not simply be omitted or miscalculated.

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