Holiday Pay & Annual Leave Compliance Check

Why this matters

Almost every worker in the UK is entitled to 5.6 weeks of paid statutory annual leave a year under the Working Time Regulations 1998 (28 days for someone working five days a week, including bank holidays if you count them towards the total). That applies to part-time staff, agency workers and many casual and zero-hours workers too, and the entitlement is pro-rated rather than removed. The most common mistake is not the amount of leave but the pay: holiday pay must reflect normal remuneration, which for many workers includes regular overtime, commission and certain allowances, not just basic salary.

Rules for irregular-hours and part-year workers were simplified from 2024, allowing leave to accrue at 12.07% of hours worked and, in some cases, holiday pay to be “rolled up” into hourly pay. Pay for those with variable earnings is generally averaged over a 52-week reference period. Getting this wrong creates a trail of small underpayments that can add up fast, because workers can bring unlawful deduction of wages claims covering a series of underpayments, and HMRC, ACAS and the new Fair Work Agency under the Employment Rights Act 2025 are all paying closer attention to holiday pay. This check helps you find gaps before a worker or enforcement body does.

What you'll need

• A list of your workers by type (full-time, part-time, irregular hours, agency, casual)
• Your holiday policy and contract wording on annual leave and holiday pay
• Payroll records showing how holiday pay is currently calculated
• Details of any regular overtime, commission or bonus payments

What you'll get

A personalised compliance report covering: a score out of 100, an executive summary, a list of findings ranked by severity, and a prioritised action plan with timeframes.