Rolled up holiday pay

For holiday years which started on the 1st of April 2024, businesses are now legally permitted to provide holiday pay on a ‘rolled up’ basis and should calculate leave and pay entitlement at a fixed rate. This rule ONLY applies, however, for those employees who work irregular hours or for part of the year and are classed as seasonal.  

Holiday pay is historically provided when the holiday leave is taken, and ‘rolled up pay’ was deemed to be illegal. Since a change in legislation, businesses have the option to pay on a rolled up basis. These rules apply:

  • This process can only be used for individuals classed as irregular hours or part-year workers
  • The amount of holiday payment should be added to normal pay and not be inclusive (for an employee with 28 days per annum full time holiday entitlement, the percentage to be added to normal pay is 12.07%)
  • Payslips must clearly show the amount for holiday pay – so if the hourly rate is £15 per hour, holiday pay would be shown as £1.81 for every hour worked.
  • The contract of employment should reflect this arrangement

If you would like guidance on implementing rolled up holiday pay, contact 121 HR Solutions on 0800 9995 121.

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