As employers, we have a crucial responsibility towards our staff, particularly when it comes to holiday pay. In this video, we’ll explore why honouring these obligations is essential for both legal compliance and good business practices.

What is Holiday Pay and Who is Entitled?

Holiday pay is an essential benefit for workers in the UK, including part-time and full-time employees but excluding freelancers. Directors may exclude themselves unless they have a service contract. The entitlement is based on a magic multiplier of 5.6, allowing employees to accrue a specific number of paid vacation days each year.

Calculating Holiday Pay

The calculation of holiday pay is straightforward using the magic multiplier. For full-time workers, it’s five times 5.6, totalling 28 days’ vacation. Part-time workers receive an entitlement based on their working days, such as three times 5.6 for three days per week, totalling 16.8 days of statutory holiday pay. Zero-hours contract workers require averaging their hours over the last 52 weeks to determine their holiday pay.

The Importance of Honouring Obligations

Failing to honour holiday pay obligations can lead to legal consequences, damage to your reputation, and a negative impact on work culture. Treating workers well, providing holiday pay, and supporting their well-being contributes to a positive work environment and helps in talent retention.

Benefits of Providing Holiday Pay

Investing in workers and providing holiday pay benefits both the employer and employees. Taking time off to recharge improves productivity and overall well-being. Additionally, holiday pay is tax-deductible, offering tax efficiency for the employer.

Avoiding Common Pitfalls

Employers should avoid rolled-up holiday pay practices and ensure that workers receive their holiday pay separately. To simplify calculations, a holiday calculator can be used, and contracts should be reviewed and renegotiated if necessary.


In conclusion, honouring holiday pay obligations is a legal and ethical responsibility for employers. Providing holiday pay supports a positive work culture, enhances employer reputation, and ensures a harmonious relationship with workers. By valuing and investing in employees, businesses can thrive and achieve their goals.

Connect with Us

We welcome your questions and topic suggestions for our I Hate Numbers YouTube channel. Feel free to drop them in the comments section. If you need assistance with payroll or have any other queries, don’t hesitate to contact us.


Stay Compliant, Empower Your Business

Honouring Holiday Pay Obligations for Employers is not just a legal requirement; it’s a way to empower your business and maintain a positive work culture. Treat your workers well, and they will support your business in return, ultimately contributing to your success.

I Hate Numbers and our sister company Numbers Knowhow helps you reduce your business overwhelm.  Furthermore, are you a small business owner, social enterprise or organisation passionate about change? In fact, managing your finances can be a lot of work, trust me.  Finally, there’s software that makes keeping track of your cash flow and financial planning easier: Numbers Know How. It helps you stay organised so you can focus on what matters to you; the creative work and the impactful change. Take a step away from the chaos with fast setup & easy navigation – numbers just got real…for the better! Get organised & make sense of it all with Numbers Know How today!