Holiday pay: the basics

Workers are entitled to a week’s pay for each week of leave they take.

A week’s pay is worked out according to the kind of hours someone works and how they’re paid for the hours. This includes full-time, part-time and casual workers.

Working pattern Pay
Fixed hours and fixed pay (part time or full time) A week’s holiday pay equals how much a worker gets for a week’s work
Shift work with fixed hours (part time or full time) A week’s holiday pay equals the average number of weekly fixed hours a worker worked in the previous 12 weeks at their average hourly rate
No fixed hours (ie casual work) A week’s holiday pay is the average pay a worker got over the previous 12 weeks (in which they were paid)

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Calculating average hourly rate

To calculate average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 12 weeks. If no pay was paid in any week, count back a further week, so that the rate is based on 12 weeks in which pay was paid.
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Rolled-up holiday pay

Holiday pay should be paid for the time when annual leave is taken. An employer cannot include an amount for holiday pay in the hourly rate (known as ‘rolled-up holiday pay’). If a current contract still includes rolled-up pay, it needs to be re-negotiated.