Additional Holiday Pay (AHP) Explained

"Additional holiday pay" is not a separate statutory payment. It is the name payroll teams and employment lawyers use for the extra pay owed when holiday pay should be higher than basic pay, usually because of regular overtime or commission, or because an irregular-hours worker needs holiday built into their pay. This guide explains the rules for 2026/27 in plain English and links to a free calculator.

What is additional holiday pay?

Almost all workers are entitled to 5.6 weeks of paid statutory holiday a year, and they must be paid a week's pay for each week of leave they take. Two situations commonly push holiday pay above basic pay:

• Regular hours, variable pay. A worker whose pay regularly includes overtime, commission or similar payments should get those reflected in the pay for part of their leave. The gap between basic and normal pay is the additional holiday pay.
• Irregular hours or part-year work. Holiday builds up as 12.07% of hours worked, and employers can pay it as a rolled-up percentage on each payslip, provided the rules below are followed.

Employers can offer more than the statutory minimum. The rules in this guide apply to the statutory 5.6 weeks; contractual extra leave follows whatever the contract says.

Basic pay, normal pay and the 4 + 1.6 weeks

For regular-hours workers, full or part-time, GOV.UK says employers must pay:

• at least 4 weeks of the worker's statutory entitlement at their normal rate of pay, and
• the remaining 1.6 weeks at a basic rate of pay.

Normal pay includes commission, regular overtime payments and payments linked to length of service or professional qualifications. It does not usually include bonus payments. Whether a payment is "regular" depends on how often and how predictably it is paid, so one-off overtime is generally left out while overtime worked most weeks is generally counted.

For irregular-hours and part-year workers, all statutory leave is paid at normal pay. The 4 + 1.6 split only applies to part-year workers whose leave year began on or before 31 March 2024.

How a week's pay is worked out

A week usually runs Sunday to Saturday. If a week had no pay, count back another week so the average covers 52 paid weeks, going back no further than 104 weeks. With fewer than 52 weeks of pay, use the average for the full weeks worked.

For a monthly-paid worker, divide the month's pay by the hours worked in the month to get an average hourly rate, multiply by the hours worked in a week, and repeat for each of the last 52 weeks to find the average.

Irregular hours and rolled-up holiday pay

Workers with irregular hours or who work part of the year accrue holiday as they work, at 12.07% of hours worked. The figure is 5.6 weeks divided by the 46.4 weeks left in a working year.

Employers can pay holiday as a rolled-up amount added to each payslip for irregular-hours and part-year workers, unless their leave year began on or before 31 March 2024. They cannot roll up holiday pay for regular-hours workers, full or part-time. Show the rolled-up amount as a separate line on the payslip so it is clear what it is for.

Worked examples

1. Regular hours with overtime

Priya has a basic week of £600 and earned £3,120 of regular overtime across 52 paid weeks, an average of £60 a week.

Paid correctly, her 5.6 weeks of leave cost 4 × £660 plus 1.6 × £600, which is £3,600. Paid at basic pay only it would be £3,360, so she is short by £240 for the year.

2. Zero-hours worker, rolled-up pay

Sam worked 1,000 hours at £14 an hour, earning £14,000. Holiday accrued is 1,000 × 12.07%, which is 120.7 hours. The rolled-up amount is £14,000 × 12.07%, which is £1,689.80, shown as its own line on the payslips.

3. Average week for irregular hours

A casual worker was paid £18,200 across their last 52 paid weeks. Their average week's pay is £350, so a week of leave is paid at £350.

4. Monthly-paid worker

Someone paid £2,990 for 172 hours in a month has an average hourly rate of £17.38 (£2,990 ÷ 172). At 40 hours a week that is a weekly figure of £695.35 for that month, before averaging across the 52 weeks.

Record keeping from April 2026

From 6 April 2026, employers must keep detailed records of annual leave and holiday pay for at least 6 years from the date the records were made. This should show the days of leave taken and how much holiday pay was paid. Employers can choose how to create and store them, but may face a fine if they cannot show they keep holiday records. Our payroll setup guide covers the wider records an employer needs to keep.

Underpaid? Back pay and time limits

Underpaid holiday pay is usually pursued as an unlawful deduction from wages. A few points matter in practice:

• Raise it first. Ask the employer to check the calculation and put it in writing. ACAS offers free early conciliation, which must be started before a tribunal claim.
• Two-year limit. In England, Wales and Scotland, back pay through an unlawful deduction claim is generally limited to the two years before the claim. A first-instance tribunal has questioned this limit, so treat it as the working rule but check current law. Northern Ireland has different rules.
• Gaps in a series. Tribunals have treated a gap of more than three months between underpayments as breaking a series, although the Supreme Court has said the question depends on the circumstances.
• Time limit. The limit was three months less a day. For events on or after 1 October 2026 it is six months less a day under the Employment Rights Act 2025. For a series of deductions, time runs from the last one, and early conciliation pauses the clock.

The calculator's back-pay tab applies the two-year limit for Great Britain. It gives a gross figure before interest, tax and National Insurance, and it is not a prediction of a tribunal award.

Checklist for employers

1. Identify workers whose pay regularly includes overtime, commission or length-of-service payments.
2. Work out each worker's normal week from the average over the previous 52 paid weeks.
3. Pay at least the first 4 weeks of statutory leave at that normal rate, and the remaining 1.6 weeks at basic pay.
4. Only use rolled-up pay for irregular-hours and part-year workers whose leave year began after 31 March 2024, and show it separately on payslips.
5. Keep records of leave taken and holiday pay paid for at least 6 years.
6. Review past holiday pay for regular overtime that was left out, and correct any shortfall.

Frequently Asked Questions