The calculation methods for holiday pay differ depending on whether you're a regular or irregular worker.
Regular worker refers to contract types such as full-time, part-time, or fixed hours.
Irregular worker refers to contract types such as zero-hour and part-term.
If you're a regular worker, this Help Centre article explains your holiday pay, while this Help Centre article explains your holiday entitlement.
If you're an irregular worker, please refer to this Help Centre article to understand how your holiday pay and entitlement are calculated.
How much you should be paid
If you're a regular worker, you have a statutory minimum annual leave entitlement of 5.6 weeks. This is regardless of the number of hours or weeks you work in a week. Your entitlement is simply your weekly days or hours, multiplied by 5.6.
Your entitlement of 5.6 weeks is split into two blocks and paid differently:
1.6 weeks (8 days if you work 5 days) paid at a basic rate.
4 weeks (20 days if you work 5 days) paid at a normal rate.
If you have any additional annual leave entitlement, it's classed as contractual leave, and it's paid at your contractual rate, but no less than the national minimum wage.
Tip: These are the minimum rates you'll receive when taking annual leave, but your employer might choose to pay more.
Basic rate
The basic rate is used for 1.6 of your 5.6-week entitlement.
Your employer can choose when the 1.6 weeks are used, but they must agree with you first. They might apply the basic rate to all bank holidays or to the first 1.6 weeks you take within the annual leave year.
This entitlement is paid at your basic rate as a minimum, i.e., your contractual hourly or daily rate of pay.
Normal rate
The normal rate is used for at least 4 of your 5.6-week entitlement.
It's based on the pay you would normally receive if you'd been working. So in addition to your daily or hourly rate, your employer must include regular payments such as:
Payments intrinsically linked to performance of work: e.g. allowances, shift bonuses, etc
Payments relating to professional or personal status or qualification: e.g., payments for increased responsibilities or length of service.
Regular payments in the preceding 52 weeks: this isn't limited to overtime.
You should see your holiday rate displayed clearly on your payslip so you can see when you're being paid 'normal pay' and not just 'basic pay'.
When you should be paid holiday pay
You'll only receive holiday pay when you take annual leave or when you leave employment.