Holiday is where notice periods get messy. You are still accruing it, you may want to use it, your employer may want you to use it, and whatever is left has to be turned into money on your final payslip. Each of those four things runs on a different rule, and getting them straight is usually worth a few hundred pounds.
You keep accruing leave right up to your last day
Statutory annual leave is 5.6 weeks a year, capped at 28 days for anyone working five days a week or more. It accrues across the leave year, and a notice period is part of the leave year like any other. Handing in your notice does not freeze it.
That includes garden leave. If you are being paid but told to stay at home, you remain employed, so leave carries on building. Our garden leave article covers the wider position on that.
Bank holidays are a separate question. GOV.UK is clear that bank or public holidays do not have to be given as paid leave, and many employers count them inside the 28 days rather than on top. Check which your contract does before you assume that the August bank holiday in your notice period is a free day.
Can your employer make you take holiday during Notice?
Yes, and this surprises people. Regulation 15 of the Working Time Regulations 1998 lets an employer require a worker to take leave on specified days, and to require a worker not to take leave on specified days, in both cases by giving notice.
The notice periods in regulation 15 are the part that gets misquoted, so here they are as GOV.UK sets them out.
| Who is giving notice | How much notice is needed | Example |
|---|---|---|
| Worker asking to take leave | Twice as long as the leave requested, plus 1 day | 5 days off needs 11 days' notice |
| Employer requiring leave to be taken | Twice as long as the leave being imposed | 5 days imposed needs 10 days' notice |
| Employer refusing or cancelling leave | As much notice as the leave requested, plus 1 day | 5 days refused needs 6 days' notice |
The doubling applies both to a worker's request and to an employer requiring leave, while an employer refusing leave gives the shorter period. GOV.UK adds 1 day to the worker's and the refusing employer's figures. Regulation 15 also allows these periods to be varied by a relevant agreement, so your contract or a collective agreement may set something different. Read that first.
Whatever is left must be paid
On termination, untaken statutory leave has to be paid in lieu. GOV.UK puts it plainly: employers must pay for untaken statutory leave, even where the worker is dismissed for gross misconduct. Termination is in fact the only situation in which statutory leave can lawfully be paid instead of taken.
Contractual leave above the statutory 5.6 weeks is different. What happens to those extra days is whatever your contract says, and plenty of contracts say they are simply lost.
Working out what you are owed
Take someone on £32,000, working five days a week, with the statutory 28 days. Their leave year runs 1 January to 31 December, and their last day is 31 July. They have already taken 10 days.
- Days of the leave year completed: 212 out of 365.
- Leave accrued: 28 × 212 ÷ 365 = 16.26 days.
- Less 10 days taken, leaving 6.26 days untaken.
- A week's pay is £32,000 ÷ 52 = £615.38, so a day is £123.08.
- 6.26 × £123.08 = about £771 to be added to the final payslip.
Many employers round part days up to the next half day, which would make it 6.5 days and about £800. Rounding down below the true accrued figure is not acceptable for statutory leave. If your final payslip shows a lower number than your own calculation, ask payroll to show their working, and check your leaving date on our notice period calculator first so you are both counting to the same day.
If you have taken more than you have accrued
This happens a lot to people who take a fortnight in May and resign in June. Your employer can only recover the overtaken days from your final pay if you agreed to that in writing, usually a clause in the contract or a signed holiday policy. Without a written agreement, they cannot simply deduct it. GOV.UK says the same.
The Notice pay rule that sits on top
There is one more layer. Sections 88 to 91 of the Employment Rights Act 1996 say that during a period of statutory notice you must receive a week's pay for each week, including weeks when you are on holiday, off sick or on maternity leave. Anything already paid to you for those weeks, holiday pay included, counts towards that liability, so it tops your pay up rather than doubling it.
The catch is section 87(4). If your contractual notice from the employer is at least one week longer than the statutory minimum for your service, those sections do not apply at all and you fall back on your contract. Our article on statutory and contractual notice works through what that means with figures, because it is the single most counter-intuitive rule in this area.
A short checklist before you resign
- Find out when your leave year starts. Accrual is measured from that date, not from your start date, unless they happen to match.
- Count what you have taken so far, including any bank holidays that come out of your allowance.
- Decide whether you would rather take the days or be paid for them, then book early, because the doubled notice rule means a fortnight off needs four weeks' notice.
- Check your contract for a clause letting the employer direct leave during notice. Most have one.
- Keep your own record. Final payslip disputes are far easier to win with a spreadsheet than with a memory.
This is general information about the law in England, Wales and Scotland rather than legal advice, and Northern Ireland has its own rules. If your final pay is wrong and the employer will not correct it, ACAS on 0300 123 1100 is free, and unpaid holiday on termination is one of the more straightforward claims an employment tribunal deals with.