Glossary · UK
What is 52-Week Holiday Pay Reference Period?
The 52-week look-back period used to calculate a week's pay for statutory holiday entitlement where a worker's pay varies, such as for those without fixed hours or fixed pay, replacing the previous 12-week reference period.
Full Definition
Where a worker's pay varies from week to week -- for example, because they work variable hours, receive regular overtime, or are paid commission linked to sales -- calculating a "week's pay" for statutory holiday pay purposes requires averaging earnings over a reference period rather than simply using a single week's figure. Since 6 April 2020, the reference period used for this calculation is 52 weeks (increased from the previous 12-week reference period), looking back over the 52 weeks in which the worker actually worked and was paid, immediately before the first day of the holiday being taken. Weeks in which the worker received no pay at all are skipped and do not count towards the 52 weeks, with the look-back period extending further back in time (up to a maximum of 104 weeks) until 52 weeks with actual pay are found. This ensures the average is not distorted by periods of unpaid leave, and better reflects a worker's typical earnings than a shorter reference period would, particularly for workers whose hours or pay fluctuate significantly, such as zero-hours or seasonal workers. The 52-week calculation applies to the statutory minimum holiday entitlement of 5.6 weeks per year; employers offering more generous contractual holiday may use a different method for the additional days, provided the statutory minimum calculation is still correctly applied. For irregular-hours and part-year workers specifically, a further reform effective for holiday years starting on or after 1 April 2024 introduced an alternative accrual method, allowing holiday entitlement to accrue at 12.07% of hours worked in a pay period, and permitting rolled-up holiday pay (paid as an uplift on ordinary pay rather than when leave is taken) for this group only, provided it is itemised separately on the payslip. Getting the reference period calculation wrong -- for example, by continuing to use the old 12-week average, or by including unpaid weeks in the 52-week count -- is a common source of holiday pay underpayment claims, particularly for workers with irregular overtime or commission-based pay.