Holiday Pay Calculator UK 2025 — Overtime, Commission & Irregular Hours
Many employers still calculate holiday pay based on basic salary only — but this is wrong for workers who regularly receive overtime, commission, or other variable pay. Supreme Court and ECJ rulings since 2014 have established that all normal remuneration must be included in holiday pay. Millions of workers have been underpaid. This calculator works out your correct entitlement.
Holiday pay must include regular overtime and commission (Bear Scotland v Fulton, Williams v British Airways). Correct calculation: 52-week average of actual weekly pay (ignoring zero weeks). Time limit: 3 months from last deduction. Contact ACAS for early conciliation before tribunal claim. Back-dating possible for continuous series of deductions.
The Law on Holiday Pay — Key Cases
The law on holiday pay has been transformed by a series of court decisions since 2011:
- Williams v British Airways [2011] ECJ — Article 7 of the Working Time Directive requires holiday pay to be the worker’s “normal remuneration,” not just basic pay.
- Bear Scotland v Fulton [2014] EAT — non-guaranteed overtime that is regularly worked must be included in holiday pay for the first 4 weeks of statutory leave.
- Flowers v East of England Ambulance Trust [2019] CA — voluntary overtime that is regularly worked (not just occasional) must also be included.
- Harpur Trust v Brazel [2022] Supreme Court — confirmed the 52-week average method for workers with irregular hours; rejected the “12.07%” calculation method previously used by many employers.
The 52-Week Reference Period
For workers with variable pay, the correct method for calculating a week’s holiday pay is to average total pay over the previous 52 weeks in which the worker actually worked and received pay. Weeks where the worker did no work (holiday weeks, sick weeks, zero-hours weeks with no work) are disregarded, and you look back further to find 52 working weeks. The resulting average represents the worker’s weekly rate for holiday pay purposes.
From April 2020, the reference period was extended from 12 weeks to 52 weeks. This benefits workers who have periods of low income (such as seasonal workers in their off-season) by smoothing out their holiday pay calculation.
The Series of Deductions Principle
Holiday pay claims to the employment tribunal are brought as unlawful deduction of wages claims (Employment Rights Act 1996, s.13). You can claim back a “series of deductions.” Each underpaid holiday is one deduction in the series. If there is a gap of more than 3 months between deductions, the series breaks and earlier deductions may be outside the tribunal’s jurisdiction. This means acting promptly and ensuring no gaps in the series is important for maximising backdating.
Frequently Asked Questions
Yes, in many cases. The courts have held that voluntary overtime that is regularly worked (i.e. it is part of your normal working pattern) must be included in holiday pay, even if you are not contractually required to work it. The test is whether the overtime is “sufficiently regular and settled” to count as part of your normal remuneration. Genuinely occasional or one-off overtime does not need to be included.
Potentially, for a continuous series of deductions. The tribunal can look back as far as the series started, provided there are no gaps of more than 3 months between deductions. However, a £30,000 cap on unlawful deductions claims was removed in 2015, so the full amount can theoretically be claimed. The time limit for submitting the claim is 3 months minus 1 day from the last deduction, and ACAS early conciliation must be started first (which pauses the clock).