Daily Holiday Pay Formula
Learn how to estimate an employee's daily holiday pay and total gross holiday pay from annual salary, working days, and leave taken.
This calculator uses a straightforward salary-based method: it converts annual contractual salary into an estimated daily amount using the employee's usual working days, then applies that rate to the holiday period. It is useful for a quick payroll estimate when pay is consistent throughout the year.
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Total Holiday Pay
Where:
First estimate the number of working days in a 52-week year. Divide annual salary by that number to find pay per working day, then multiply by the number of paid holiday days.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| annualSalary - Annual salary | The employee's gross annual contractual salary before deductions. | currency |
| workingDaysPerWeek - Working days per week | The employee's usual number of paid working days in a normal week. | days |
| holidayDaysTaken - Holiday days taken | The number of paid holiday days included in the estimate. | days |
| annualWorkingDays - Estimated annual working days | The estimated number of contracted working days in a 52-week year. | days |
| dailyHolidayPay - Daily holiday pay | The estimated gross salary value of one paid holiday day. | currency |
Step-by-Step Calculation
Estimate annual working days
Multiply the usual weekly working pattern by 52 weeks to estimate the working days used as the calculation basis.
annualWorkingDays = workingDaysPerWeek * 52
Calculate the daily salary rate
Divide gross annual salary by estimated annual working days to find the estimated value of one paid day.
dailyHolidayPay = annualSalary / annualWorkingDays
Calculate holiday pay for the leave period
Multiply the daily holiday pay amount by the number of holiday days being paid.
totalHolidayPay = dailyHolidayPay * holidayDaysTaken
Example: full-time employee taking one week of leave
Estimate annual working days
5 × 52
260 days
Calculate daily holiday pay
£36,000 ÷ 260
£138.46
Calculate total holiday pay
£138.46 × 5
£692.31
Final Result
Estimated gross daily holiday pay: £138.46. Estimated gross pay for 5 holiday days: £692.31.
Assumptions
- ✓A year is treated as 52 weeks.
- ✓The employee has a regular, consistent annual contractual salary.
- ✓Holiday is taken on normal paid working days.
- ✓The calculation uses the employee's usual working days per week.
- ✓Amounts are gross, before tax, National Insurance, pension contributions, and other deductions.
Limitations
- !The method does not include overtime, commission, bonuses, allowances, or other variable earnings.
- !It may not reflect holiday-pay rules that apply to irregular-hours workers or workers with variable pay.
- !Contract terms, worker status, jurisdiction, and applicable reference periods can affect the amount actually due.
- !The calculation does not account for unpaid leave, salary changes during the year, or payroll-specific rounding policies.
Common Mistakes to Avoid
Entering monthly salary instead of annual salary.
Using calendar days rather than the employee's normal paid working days.
Entering holiday days that include non-working days for a part-time employee.
Treating the gross result as the employee's net payment after deductions.
Using the simple salary method without checking whether variable earnings need separate treatment.
Related Formulas
Frequently Asked Questions
What is the formula for daily holiday pay from annual salary?
For this estimate, daily holiday pay equals annual salary divided by usual working days per week multiplied by 52.
How do I calculate holiday pay for five days?
Calculate the estimated daily rate, then multiply it by five. For example, £138.46 per day for five days is £692.31.
How is holiday pay calculated for a part-time employee?
Use the employee's actual normal working days per week. A person working three paid days each week would use 3 rather than 5.
Does daily holiday pay include tax and National Insurance?
No. This calculation gives a gross amount before tax, National Insurance, pension contributions, and other deductions.
Should overtime and commission be included in holiday pay?
This formula uses contractual annual salary only. Whether variable earnings need to be considered depends on the applicable arrangements and rules.
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