Hourly Holiday Pay Formula
Learn how estimated holiday pay, paid holiday hours and accrued leave are calculated for an hourly-paid worker with a regular work pattern.
This calculation converts a worker's usual weekly hours into daily paid hours, then applies their hourly rate to the booked holiday time. It also gives a simple estimate of leave accrued during a 52-week leave year, helping payroll teams and workers check the scale of a holiday payment.
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Estimated Holiday Pay
Where:
Find the average hours in one working day, multiply those hours by the booked holiday days, and then multiply by the normal gross hourly rate.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| hourlyRate - Hourly pay rate | The worker's normal gross hourly rate before deductions. | currency |
| usualWeeklyHours - Usual weekly hours | The worker's usual or average paid hours in a typical week. | hours |
| workDaysPerWeek - Working days per week | The number of days normally worked in a week. | days |
| holidayDaysRequested - Holiday days to pay | The number of booked holiday days included in the estimate. | days |
| weeksWorkedInLeaveYear - Weeks worked in leave year | Completed weeks used to estimate accrued leave in the current leave year. | weeks |
| annualEntitlementDays - Annual holiday entitlement | The estimated full-year leave allowance based on 5.6 weeks, subject to a 28-day cap. | days |
Step-by-Step Calculation
Calculate average daily hours
Divide usual weekly paid hours by normal working days to convert the work pattern into hours per holiday day.
averageDailyHours = usualWeeklyHours / workDaysPerWeek
Calculate paid holiday hours
Multiply the requested holiday days by the average daily hours.
holidayHours = holidayDaysRequested * averageDailyHours
Calculate estimated gross holiday pay
Multiply paid holiday hours by the normal gross hourly rate.
holidayPay = holidayHours * hourlyRate
Estimate annual leave entitlement
Estimate a full-year allowance as 5.6 weeks of the normal work pattern, capped at 28 days in this calculator.
annualEntitlementDays = min(5.6 * workDaysPerWeek, 28)
Estimate leave accrued so far
Pro-rate the estimated annual entitlement over 52 weeks and do not allow the result to exceed the annual allowance.
accruedLeaveDays = min(annualEntitlementDays * weeksWorkedInLeaveYear / 52, annualEntitlementDays)
Example: One week of holiday for a full-time hourly worker
Average daily hours
37.5 hours ÷ 5 days
7.5 hours per day
Paid holiday hours
5 days × 7.5 hours
37.5 hours
Estimated holiday pay
37.5 hours × £15.00
£562.50
Annual entitlement
min(5.6 × 5 days, 28 days)
28 days
Leave accrued after 26 weeks
28 days × 26 ÷ 52
14 days
Final Result
Estimated gross holiday pay is £562.50 for 37.5 paid holiday hours. Estimated accrued leave is 14 days out of 28 days.
Assumptions
- ✓The worker has a regular work pattern that can be represented by usual weekly hours and working days.
- ✓The entered hourly rate is the normal gross rate used for this simplified estimate.
- ✓Annual entitlement is estimated as 5.6 weeks of the normal working week, with a maximum of 28 days.
- ✓Leave accrues evenly over a 52-week leave year for the purpose of this estimate.
- ✓Booked holiday days are assumed to be normal working days of equal length.
Limitations
- !The calculation does not determine the legal or contractual holiday pay method that applies to a particular worker.
- !Workers with variable hours, variable pay, overtime, commission or irregular schedules may need a reference-period average instead of a single hourly rate.
- !The calculator does not account for leave already taken, carry-over, leaver adjustments, joiner rules or company-specific rounding.
- !The gross result excludes tax, National Insurance, pension contributions and other payroll deductions.
Common Mistakes to Avoid
Entering weekly hours as daily hours, which can materially overstate paid holiday time.
Using calendar days rather than the worker's normal working days for holiday days requested.
Entering net take-home pay rather than the gross hourly rate.
Assuming public holidays are always separate from the annual entitlement; the contract may treat them differently.
Using a regular-hours estimate for a worker whose pay or hours change substantially from week to week.
Related Formulas
Frequently Asked Questions
What is the formula for hourly holiday pay?
For a regular schedule, estimated holiday pay is holiday days multiplied by average daily hours and the normal hourly rate. Average daily hours are usual weekly hours divided by working days per week.
How do I convert holiday days into paid hours?
Divide usual weekly hours by normal working days each week, then multiply that daily figure by the number of holiday days booked.
How is annual leave entitlement estimated in this calculator?
It uses 5.6 times the normal days worked per week, subject to a 28-day annual cap. This is then pro-rated across 52 weeks to estimate accrued leave.
Does the holiday pay formula include deductions?
No. The formula produces an estimated gross amount before deductions such as tax, National Insurance and pension contributions.
Why might actual holiday pay differ from this estimate?
Actual pay can differ where contractual terms, irregular work patterns, variable earnings, relevant reference-period calculations or payroll rounding apply.
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