New Rules for Calculating Holiday Leave & Pay: A Guide from Danton HR
Until recently, holiday pay for staff who work variable hours has always been calculated using an average from the last 12 weeks that they worked.

However, the guidance has now changed and since April 6th 2020, holiday pay must be calculated using an average over 52 weeks. We’ve put together the following guide, which outlines everything you need to know about calculating holiday pay. Key takeaways from this article:

  • The holiday pay reference period is now 52 weeks, not 12

  • It is important to work out an employee’s weekly pay in order to correctly calculate their pay for the reference period

  • Almost all employees are legally entitled to 5.6 weeks paid holiday per year

  • An employer can include bank holidays as part of annual leave Weekly pay and legislation Even in cases where an employee is not paid weekly, it is important to work out the amount that they would be paid on a weekly basis. This is because the weekly pay figure is used to calculate holiday pay across the 52 week reference period.

Key Tips:

The concept of “weekly pay” is used in legislation because the length of a week remains the same, whereas the length of months and years are variable.

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