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What rolled-up holiday pay is  

Rolled-up holiday pay is when you include an amount for holiday pay in your worker’s hourly rate, instead of paying holiday pay when your worker takes annual leave. 

For leave years beginning on or after 1 April 2024, you must only offer rolled-up holiday pay to employees who fall within one of the following categories: 

• irregular hours workers – people whose paid hours in each pay period are wholly or mostly variable under the terms of their contract 
• part-year workers – people who are only required to work part of the year, and there is a gap of at least a week in which they do not work and are not paid 

You will be breaking the law if you use rolled-up holiday pay for anyone who does not fall into these categories. 

Read the Department of Trade and Industry’s guidance for more information about this. 

Your responsibility as an SIA approved contractor 

In most cases we expect workers to receive their holiday pay when they take their holiday. 

If you use rolled-up holiday pay, you must demonstrate that you comply with the law, including the Working Time Regulations 1998, and associated government guidance. You must do this for: 

• your own employees 
• the employees of any sub-contractors you use 
• any operatives provided to you by a labour provider 

You should identify any use of rolled-up holiday pay in your self-assessment. Your assessor will discuss this with you as part of their assessment planning. 

What your assessor will look for 

If you use rolled-up holiday pay, your assessor will expect you to: 

• be up to date with the latest relevant law and guidance 
• be open with them about your use of rolled-up holiday pay 
• show that your approach is legal and well-managed 

Your assessor will check that you: 

• correctly determine the type of workers eligible for rolled-up holiday pay 
• effectively communicate your approach so that workers understand how this impacts them – this should include how you calculate holiday pay and what it covers (such as overtime or commission) 
• separately identify the amount of holiday pay on payslips 
• make sure that holiday pay is included in your workers’ gross pay and is subject to tax and National Insurance payments 
• regularly encourage workers to take holiday and use their full entitlement each year 
• reduce any barriers to taking holiday and do not discriminate or disadvantage workers 

Evidence you should have 

Your assessor may ask to see: 

• full staff lists showing who receives rolled-up holiday pay 
• payslips showing separation of holiday pay from working hours 
• details of the hours on which rolled-up holiday pay is based 
• calculations used to work out holiday pay 
• audit records demonstrating that holiday entitlement and pay is operated correctly 
• a holiday policy and procedure explaining how you manage holiday entitlement and pay 
• communications to staff on how you manage holiday pay (for example, in a company handbook, letters of employment, induction materials) 
• feedback from staff to check that they understand how their holiday entitlement is administered and that they receive the correct holiday pay 
• training records to show that individuals responsible for administering holiday pay have had appropriate training 

Your assessor may speak to staff affected by your rolled-up holiday pay arrangements. 

What happens if you do not comply 

If you do not meet our requirements, your assessor will raise an improvement need. If this happens, you must do one of the following: 

• stop using rolled-up holiday pay 
• address any areas where you are not meeting our requirements 

Your assessor will arrange a re-visit to confirm what you have done. If you need more than 6 weeks to make changes, you must get approval from us.