What is Rolled-Up Holiday Pay?

Full Definition

Rolled-up holiday pay means an employer spreads a worker's statutory holiday entitlement across their normal wages, usually as a percentage uplift, instead of paying it when leave is taken. For irregular-hours and part-year workers, UK rules allow holiday pay to be calculated at 12.07 per cent of pay earned in a period and paid alongside earnings, provided it is shown clearly as a separate line on the payslip. The 12.07 per cent reflects the 5.6 weeks of statutory annual leave as a proportion of the working year. For regular full-time staff, rolled-up holiday pay has historically been discouraged, and leave should normally be paid when taken. The risk of rolling up pay is that workers may not take adequate rest, and unclear payslips can lead to claims for unpaid holiday. If you are paid this way, check your payslip itemises the holiday element and that your hourly rate still meets the National Living Wage of GBP 12.71 for those aged 21 and over.

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