If you are working out unused holiday when leaving job in the uk, here is the direct answer: your employer must pay you for any statutory holiday you have built up but not taken by the time you leave. This payment is called payment in lieu of holiday, and it should appear in your final pay. It does not matter whether you resigned, were made redundant, or were dismissed — even a dismissal for gross misconduct does not remove the right to be paid for untaken statutory leave.

That rule surprises a lot of people. During your employment, you cannot normally swap holiday for cash — the law expects you to take your leave as time off. Leaving your job is the one exception: it is the only time statutory holiday can be turned into money instead of days off. So if you hand in your notice with ten days of holiday still banked, those ten days do not simply vanish. They are either taken during your notice period or paid to you at the end.

There are details that change the final figure: your annual entitlement, how far through the holiday year you are when you leave, how much leave you have already taken, and your daily rate of pay. Your contract can also add its own rules for any holiday above the statutory minimum. This article works through each point, with worked examples you can check against your own numbers.

The Statutory Minimum: 5.6 Weeks a Year

Almost every worker in the UK is legally entitled to 5.6 weeks of paid holiday a year. That figure is known as the statutory leave entitlement, and it applies whether you are full-time, part-time, on a fixed-term contract, or working through an agency. For someone working a five-day week, 5.6 weeks works out to 28 days a year, and the statutory entitlement is capped at 28 days — so working six days a week does not push the minimum any higher.

Part-time workers get the same 5.6 weeks, just made up of fewer days: multiply the days you work each week by 5.6. Someone working three days a week is entitled to 16.8 days a year (3 × 5.6), and someone working two days a week gets 11.2 days. Bank holidays can be counted inside that 28-day figure if your contract says so, which is why “28 days including bank holidays” and “28 days plus bank holidays” are very different offers — the second one is worth eight extra days in England and Wales.

Everything here starts from that statutory floor. Your employer may offer more — 25 days plus bank holidays, for example, which comes to 33 days — and anything above the statutory minimum is contractual leave. Contractual leave follows your contract, not the statute, so it can be treated differently when you leave. That distinction is the key to the whole question of unused holiday when leaving job in the uk: the legal guarantee covers the statutory part, and your contract governs the rest.

Taking Holiday During Your Notice Period

Before any money changes hands, there is a simpler option: take the holiday. During your notice period, you may be able to take whatever statutory leave you have left — often the best outcome if you would rather have the time off than the cash, or want a break between jobs. Raise it early in the notice period rather than in the final week, when there may be no room left to fit the days in.

Your employer can also direct you to take holiday during your notice period, which is common when a business wants a clean handover or does not want a large payment in lieu at the end. An employer that directs you to take leave must give proper notice — generally at least twice as many days’ notice as the length of leave being directed — and the leave must fall inside the notice period. If you are on garden leave, your employer will usually expect you to use up your remaining holiday during that period, and your contract or garden-leave letter will normally say so.

One practical point: taking the leave and being paid in lieu are alternatives, not extras. If you take five days during your notice period, only what remains after that is paid in your final pay. You cannot take the days and then claim payment for them again. So work out the full balance you are owed first, then decide how much of it you want as time off and how much as money.

How Unused Holiday When Leaving Job in the UK Is Calculated

The calculation itself is straightforward, and it has three steps. First, work out how much leave you have accrued up to your leaving date. Second, subtract the leave you have already taken in that holiday year. Third, multiply what is left by your daily rate of pay:

Annual entitlement × proportion of the holiday year worked − leave already taken = unused days

Unused days × daily rate of pay = payment in lieu

The proportion of the holiday year is the part that catches people out, because the holiday year is not always the calendar year. It might run from January to December, from April to March, or from the anniversary of your start date. What matters is where your leaving date falls inside that year: leave exactly halfway through, and you will have accrued roughly half your annual entitlement.

For a first check, the monthly method is accurate enough: divide your annual entitlement by 12 to get the monthly accrual, then multiply by the number of complete months worked in the holiday year. Someone entitled to 28 days accrues about 2.33 days per month. Payroll departments often calculate more precisely, counting the exact days between the start of the holiday year and the leaving date, but the monthly method will get you close enough to spot a mistake.

Step	What to do	Example
1. Annual entitlement	Your full-year statutory entitlement in days	28 days
2. Proportion worked	Months worked in the holiday year ÷ 12	6 ÷ 12 = 0.5
3. Accrued leave	Entitlement × proportion	28 × 0.5 = 14 days
4. Leave taken	Days already taken this holiday year	10 days
5. Unused days	Accrued − taken	14 − 10 = 4 days
6. Payment in lieu	Unused days × daily rate	4 × £115.38 = £461.54

Note the rounding question. Holiday often accrues in fractions — 14.6 days, say — and employers handle fractions differently. A fraction of a day is still worth money, so if your employer’s figure is a whole number and yours is not, ask how the fraction was treated before accepting it.

Worked Example 1: A Full-Time Leaver Halfway Through the Year

Sarah works five days a week on a salary of £30,000 a year. Her employer’s holiday year runs from January to December, and her contract gives her the statutory minimum of 28 days. She resigns and her last working day is 30 June, exactly halfway through the holiday year. She has taken 10 days of holiday so far this year.

Her accrued entitlement is 28 days × 6/12, which is 14 days. She has taken 10, so she is owed 4 days. Her daily rate is her annual salary divided by 52 weeks, then divided by the five days she works each week: £30,000 ÷ 52 = £576.92 a week, and £576.92 ÷ 5 = £115.38 a day. Her payment in lieu is therefore 4 × £115.38 = £461.54, paid gross in her final pay before tax and National Insurance are deducted.

If Sarah had taken no holiday at all before resigning, her unused balance would be the full 14 accrued days, worth 14 × £115.38 = £1,615.38. If she had taken all 28 days before leaving, she would have taken 14 days more than she had accrued — the over-taken leave problem covered later in this article. And if her employer asks her to take some of the four days during her notice period, the payment falls accordingly: two days taken as leave leaves two days to be paid, worth £230.77. The total value is the same either way; only the split between time off and money changes.

Worked Example 2: A Part-Time Leaver

Part-time workers sometimes assume they lose out when they leave, because their entitlement is smaller. They do not — the same rules apply, just with smaller numbers. The key is to use your own pro-rata entitlement, not the full-time figure.

James works three days a week, seven and a half hours a day, at £15.00 an hour. His annual entitlement is 3 × 5.6 = 16.8 days. His employer’s holiday year starts on 1 April, and he leaves on 31 December, nine months into the year. He has taken 8 days of holiday.

His accrued entitlement is 16.8 × 9/12 = 12.6 days. Subtracting the 8 days taken leaves 4.6 days owed. His daily rate is 7.5 hours × £15.00 = £112.50, so his payment in lieu is 4.6 × £112.50 = £517.50.

Notice that James is paid for a fraction of a day — 0.6 of a day, worth £67.50. Fractions are normal for part-time workers, because pro-rata entitlements rarely divide neatly. If your employer’s calculation drops the fraction without explanation, query it, because over a whole workforce those fractions add up to real money. If your final payslip shows hours rather than days, convert before comparing, so you are comparing like with like: 16.8 days at 7.5 hours is 126 hours, and 12.6 days is 94.5 hours.

What a Day’s Holiday Pay Is Worth

For someone on fixed hours and fixed pay, a day’s holiday pay is simply their usual daily rate, as in the examples above: annual salary divided by 52, divided by the days worked each week, or hourly rate multiplied by the hours in a normal day.

For anyone whose pay varies — shift workers, people with regular overtime, commission earners — the calculation is different. GOV.UK’s holiday pay guidance says a week’s pay for workers without fixed hours or fixed pay is based on average pay over the previous 52 weeks in which they were paid. Weeks with no pay are skipped, looking back up to 104 weeks, and if the worker has been employed for less than 52 weeks, the average uses the weeks they have actually worked. For the first four weeks of statutory leave, that average must reflect normal remuneration: regular overtime, commission and shift premiums are included, not just basic pay.

That 52-week rule matters for leavers, because your final payment in lieu should be based on the same rate as your holiday pay would have been. If your last few months were quiet but the previous year included regular overtime, a payment based only on recent weeks would understate what you are owed. If your employer has used a short reference period, ask whether the 52-week average was applied. Regular overtime also affects how much holiday pay you build up in the first place, because it feeds into the rate, not the number of days — our article on whether overtime counts towards holiday pay explains that rule in detail. And if you want a quick estimate of your own figure, work out the value of your untaken leave with our holiday pay calculator.

Irregular Hours, Zero-Hours Contracts and Rolled-Up Pay

If you work irregular hours or are on a zero-hours contract, your leave builds up differently. For leave years beginning on or after 1 April 2024, irregular-hours and part-year workers accrue holiday at 12.07% of the hours they actually work in each pay period — 5.6 ÷ 46.4, the leave weeks divided by the working weeks left in the year once leave is excluded.

When you leave, your employer should pay you for whatever leave you have accrued under that method but not yet taken. The calculation is the same in principle — accrued minus taken, multiplied by your rate — but the accrual is measured in hours rather than days, so your final payment will be an hourly figure.

There is one trap to watch for: rolled-up holiday pay. Some employers of irregular-hours workers add a 12.07% uplift to each payslip instead of paying holiday pay when leave is taken. Where that has been done lawfully and the uplift is itemised separately on your payslip, the holiday has effectively already been paid, and you cannot claim it again when you leave. But rolled-up pay only counts if it was genuinely separate and identifiable — an hourly rate that simply looks a bit generous, with no holiday element shown, is not rolled-up pay. If your payslips never showed a separate holiday element, ask your employer to evidence the uplift before accepting that nothing more is due. Our explainer on rolled-up holiday pay for irregular-hours workers goes through exactly what a lawful arrangement looks like.

What If You Took More Holiday Than You Had Accrued?

The mirror image of unused holiday is over-taken holiday: you leave having taken more leave than you had built up by your leaving date. This is common when someone books a long holiday early in the holiday year and then resigns.

GOV.UK’s rule here protects the worker: if you have taken more leave than you are entitled to, your employer must not take money from your final pay unless that deduction was agreed beforehand in writing, normally in your employment contract, staff handbook, or another written document you accepted. If there is no such written agreement, your employer cannot simply dock the excess from your final pay.

If there is a written agreement, the deduction is limited to the value of the excess days at your daily rate, calculated the same way as payment in lieu. Using Sarah’s figures: 20 days taken against 14 accrued is an excess of 6 days, worth 6 × £115.38 = £692.31. Even then, the deduction cannot take her pay below the National Minimum Wage for the hours actually worked in her final pay period.

Check your contract before your final payday, not after. If it contains a deduction clause, you know the excess will come off your final pay and you can plan around it. If it does not, and money is deducted anyway, that is an unlawful deduction from wages, and the route for challenging it is covered later in this article.

Does It Matter How You Leave?

For statutory leave, no. The right to payment in lieu applies however the employment ends:

• Resignation. The most common case. Your accrued but untaken statutory leave is paid in your final pay, unless you take it during your notice period.
• Redundancy. The same rule applies, and the payment sits alongside any redundancy pay and notice pay — it is a separate item that redundancy pay does not absorb.
• Dismissal, including for gross misconduct. GOV.UK states this explicitly: employers must pay for untaken statutory leave even if the worker is dismissed for gross misconduct. Losing your job for misconduct can cost you notice pay and a reference, but it does not forfeit holiday you have already earned.
• End of a fixed-term contract. When the contract ends, the same payment in lieu rule applies to whatever statutory leave remains.

What can differ by leaving route is the contractual leave above the statutory minimum. An employer can write its own rules for that extra leave — for example, that it is lost on resignation, or paid only if you work your full notice. That is lawful, because the extra leave is a contractual benefit rather than a statutory right. So if your contract offers 33 days, expect the statutory part to be paid as a matter of law and the contractual part to follow whatever your contract says.

Notice periods can also change the arithmetic. If your employer pays you in lieu of notice (PILON), your employment ends sooner, so you accrue less leave. Conversely, a long notice period worked in full gives you more time to accrue leave and more opportunity to take it. If your leaving date moves, re-run the calculation from the new date.

Checking Your Final Payslip

Your final payslip is where payment in lieu should be visible, and it deserves a careful read. A payslip must show gross pay, deductions, and net pay, and any payment in lieu should be identifiable rather than buried inside a single lump sum. Look for:

1. Pay up to your leaving date — salary or wages for the days or hours actually worked in the final period.
2. Payment in lieu of untaken holiday — the number of days (or hours) and the rate used. If only a lump sum is shown, ask payroll for the breakdown.
3. Notice pay or payment in lieu of notice — if applicable, shown separately from holiday pay.
4. Deductions — tax, National Insurance, pension, and any deduction for over-taken holiday, which should only appear if it was agreed in writing.
5. Other final items — redundancy pay, if applicable, and any outstanding expenses or bonuses.

Payment in lieu is taxable like any other pay: income tax and National Insurance apply, and pension contributions may also be taken depending on your scheme rules. So the gross figure in your calculation will not be the amount that lands in your bank account. Check the payslip line matches your daily rate before worrying about the net figure.

Timing matters too. Final pay is normally paid on your usual payday, or on the date your contract specifies. If your leaving date falls just after a payday, the wait can feel long, but that does not mean the payment has been missed. If the usual payday passes with no payment in lieu and no explanation, chase it in writing — an email to payroll creates a record that a phone call does not.

What to Do If Your Employer Will Not Pay

Most payment-in-lieu problems are mistakes, not malice: the wrong holiday year, the full-time figure used for a part-time worker, a fraction dropped, or the wrong daily rate. The fastest fix is usually a short, polite, written query to payroll setting out your own calculation — annual entitlement, proportion of the year worked, leave taken, unused days, daily rate — and asking them to explain any difference. Payroll can correct an error far more easily before the payroll run than after it.

If the written query does not resolve it, the next step is a formal grievance or written complaint under your employer’s procedure. Keep copies of everything: your contract, holiday records, final payslip, and correspondence. Holiday records matter most, because the dispute will usually turn on how many days you took and how many you had accrued.

If the employer still refuses to pay, the legal route is a claim for unlawful deduction from wages in the employment tribunal. Before a tribunal claim, you normally need to go through Acas early conciliation, a free process designed to settle the dispute without a hearing. There are strict time limits — generally three months less one day from the date the payment was due — so do not let a slow internal process eat up the whole window. Take advice early if the amount is significant or the employer disputes the principle rather than the arithmetic.

The Bottom Line

Leaving a job does not mean losing your holiday. The rules on unused holiday when leaving job in the uk are clear: statutory leave you have earned but not taken must either be taken during your notice period or paid to you in your final pay, however you leave — and even a dismissal for gross misconduct does not remove that right. The figure comes from a simple calculation: your annual entitlement, multiplied by the proportion of the holiday year you worked, minus the leave you already took, multiplied by your daily rate. Check each of those four numbers against your own records, remember that anything above the statutory minimum follows your contract rather than the law, and query any deduction for over-taken leave that was not agreed in writing. That check takes ten minutes, and it is the difference between leaving with everything you are owed and leaving money behind.

Sources

• GOV.UK — Holiday entitlement: taking holiday before leaving a job: https://www.gov.uk/holiday-entitlement-rights/taking-holiday-before-leaving-a-job
• GOV.UK — Holiday entitlement: entitlement (5.6 weeks, 28-day cap): https://www.gov.uk/holiday-entitlement-rights/print
• GOV.UK — Holiday entitlement: holiday pay (a week’s pay, 52-week average): https://www.gov.uk/holiday-entitlement-rights/holiday-pay