Accountants Holiday Pay Calculator Formula
Learn how estimated gross holiday pay is calculated from reference-period pay, paid weeks, normal working days, and holiday days.
This calculator estimates gross holiday pay by converting average weekly pay into a daily rate, then applying that rate to the selected working holiday days. It also gives an indicative annual entitlement based on 5.6 weeks of leave, subject to a 28-day cap.
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Estimated Holiday Pay
Where:
First find average weekly pay, divide it by the employee's usual working days each week to estimate one holiday day's pay, then multiply by the number of holiday days to be paid.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| referencePeriodPay - Pay in reference period | Gross pay received in the paid weeks included in the reference period. | currency |
| paidWeeks - Paid weeks in reference period | Number of weeks with pay used to calculate the average weekly pay. | weeks |
| workingDaysPerWeek - Usual working days per week | The employee's normal number of working days in a week. | days |
| holidayDays - Holiday days to pay | Number of working holiday days for which estimated pay is required. | days |
| averageWeeklyPay - Average weekly pay | Average gross pay for each paid week in the reference period. | currency |
| dailyHolidayRate - Daily holiday pay rate | Estimated gross pay for one usual working holiday day. | currency |
Step-by-Step Calculation
Calculate average weekly pay
Divide gross pay in the reference period by the number of paid weeks included.
averageWeeklyPay = referencePeriodPay / paidWeeks
Calculate the daily holiday rate
Divide average weekly pay by the employee's usual working days each week.
dailyHolidayRate = averageWeeklyPay / workingDaysPerWeek
Calculate estimated holiday pay
Multiply the estimated daily rate by the holiday days being paid.
holidayPay = dailyHolidayRate * holidayDays
Calculate indicative annual entitlement
Multiply normal working days by 5.6 weeks and apply the 28-day cap used in this calculator.
statutoryHolidayEntitlement = min(workingDaysPerWeek * 5.6, 28)
Example: holiday pay for five days of leave
Average weekly pay
£31,200 ÷ 52
£600.00
Daily holiday rate
£600.00 ÷ 5
£120.00
Estimated holiday pay
£120.00 × 5
£600.00
Indicative annual entitlement
min(5 × 5.6, 28)
28 days
Final Result
Estimated gross holiday pay for 5 holiday days is £600.00.
Assumptions
- ✓The pay entered represents gross pay relevant to the holiday-pay calculation for the employee's circumstances.
- ✓Every paid week entered is given equal weight when calculating average weekly pay.
- ✓The employee's usual working days per week are a suitable basis for converting weekly pay into a daily rate.
- ✓The annual entitlement estimate uses 5.6 weeks of leave and a maximum of 28 days for a regular working pattern.
Limitations
- !The calculation does not determine which payments must be included in holiday pay under applicable rules.
- !It does not account for unpaid weeks, irregular hours, changing schedules, or complex reference-period adjustments.
- !Contractual holiday entitlement may exceed the indicative amount shown.
- !The result is gross pay before tax, National Insurance, pension, or other deductions.
Common Mistakes to Avoid
Entering annual salary instead of the actual gross pay for the paid weeks selected.
Using calendar days of leave rather than the employee's working holiday days.
Dividing by 52 when the entered pay covers fewer paid weeks.
Leaving out regular earnings that may be relevant to the applicable calculation.
Treating the 28-day figure as an automatic entitlement for every contract and working arrangement.
Related Formulas
Frequently Asked Questions
What is the holiday pay formula?
The calculator divides reference-period gross pay by paid weeks, divides the weekly average by usual working days per week, and multiplies the result by holiday days.
How is average weekly pay calculated?
Average weekly pay equals pay in the reference period divided by the number of paid weeks entered.
How do I calculate a daily holiday pay rate?
Divide average weekly pay by the employee's usual working days per week.
Does this formula calculate gross or net holiday pay?
It estimates gross holiday pay. Deductions are not included.
Why is annual entitlement capped at 28 days?
The calculator applies a common UK 5.6-week calculation for regular working patterns, with a maximum of 28 days.
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