Know how much holiday to give your staff

Payment for leave

A worker's entitlement to paid holiday or leave starts on the first day of employment and is not subject to a minimum period of employment.

For each week of leave, workers are entitled to a week's pay. A week's pay is calculated according to the type of work performed:

• for workers on fixed hours and pay it equals the amount due for a week's work
• for workers on variable hours and pay (piece work, bonus or commission workers) it equals the average hourly rate multiplied by the normal working hours in a week
• for shift workers it equals the average weekly hours of work in the preceding 12 weeks at the average hourly rate

If a worker requests payment in place of taking the time off, you should explain that, in most cases, this is unlawful. All employees need to have rest away from work for health and safety reasons. Payments in lieu are normally only allowed when the employment comes to an end. See the page in this guide on holiday entitlement.

You are not obliged to grant workers' requests for extended leave without pay. You may however choose to negotiate a policy for unpaid leave with your workers, the trade union, or employee representative. If the request is for parental leave - see our guide on maternity, paternity and adoption - an overview - you may only postpone the leave for up to six months, and only if it would unduly disrupt the operation of your business.

It is useful to have written procedures for calculating holiday pay and a policy for your business for unpaid leave.

Subjects covered in this guide

• Introduction
• Payment for leave
• Public and Bank Holidays
• Restrictions and notice
• Statutory holiday entitlement
• Leave and termination of employment

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