Does Holiday Pay Include Overtime, Commission and Bonuses? UK Rules (2026)
Yes. In the UK, holiday pay for at least 4 of the 5.6 weeks must include regularly paid overtime, commission and seniority or qualification payments, averaged over the last 52 paid weeks; the other 1.6 weeks can be paid at basic, and bonuses count only if tied to your own performance.
Yes. Since 1 January 2024, UK holiday pay for at least the first 4 weeks of statutory leave must include commission, other payments linked to the work in your contract, payments for seniority, length of service or professional qualifications, and overtime you have been regularly paid in the previous 52 weeks. The remaining 1.6 weeks can be paid at basic pay, and most bonuses only count if they are tied to your own performance (as of 2026).
The rule is in regulation 16(3ZA) of the Working Time Regulations 1998, added by the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023. It covers England, Wales and Scotland; Northern Ireland has its own working time rules.
Why are there two kinds of holiday pay: 4 weeks and 1.6 weeks?
Full-year workers get 5.6 weeks of statutory paid holiday, 28 days for someone working five days a week. In law that is two separate pots:
| Pot | Source | How much | Pay rate |
|---|---|---|---|
| "EU" leave | Regulation 13 | 4 weeks (20 days on a 5-day week) | Normal pay, including the extras below |
| Additional UK leave | Regulation 13A | 1.6 weeks (8 days on a 5-day week) | Can be basic pay |
GOV.UK's guidance says basic pay "should reflect the worker's wages (minus bonuses, commission and other additional payments)". One catch: if you work premium-rate shifts every week because of when they fall, that premium should still be in your basic holiday pay.
The regulations don't say which pot is used first. GOV.UK notes that many employers simply pay all 5.6 weeks at the normal rate, and advises employers who pay two rates to explain this clearly, for example in the contract or staff handbook. Any extra contractual holiday above 5.6 weeks is paid however the contract says.
For irregular-hours and part-year workers, the split doesn't apply: GOV.UK says all their leave must be paid at the normal rate. Their accrual works differently, and we cover it in holiday pay for irregular hours and the 12.07% rule.
What counts as "normal pay" for holiday pay since 2024?
Regulation 16(3ZA) lists three types of payment that must be part of a week's pay for the 4 weeks:
- Payments linked to your contractual tasks, "including commission payments, which are intrinsically linked to the performance of tasks" you are required to carry out under your contract.
- Status payments for "length of service, seniority or professional qualifications".
- Other payments, "such as overtime payments", that have been regularly paid to you in the 52 weeks before the first day of your holiday.
A payment only needs to fit one of these. Commission counts because it is linked to the work, even if it varies a lot from month to month. Overtime counts because it is regular, even though doing it isn't one of the tasks in your contract.
Does holiday pay include overtime?
Yes, if it has been paid regularly over the previous year. Acas puts it simply: "Holiday pay must include overtime payments if an employee has regularly received overtime pay during the previous year." That applies to at least 4 weeks of holiday for most employees and to all 5.6 weeks for irregular-hours and part-year workers.
The regulations don't define "regularly", so it comes down to the pattern. Overtime most weeks or every month over the year clearly counts; a single extra shift in March is a much weaker case. If you think your holiday pay leaves out overtime you work routinely, compare your last 52 weeks of payslips with what you were paid for a week off.
Is commission included in holiday pay in the UK?
Yes. Acas says employers "must include payments that are linked to doing required tasks in the contract", and that "this includes commission payments". As with overtime, it must be in at least 4 weeks of holiday pay; the employer can choose to include it for all 5.6 weeks but doesn't have to.
Commission matters most in sales roles where basic pay is low. Paid at basic only, every week off would mean a noticeable drop in income.
Are bonuses included in holiday pay?
Sometimes. GOV.UK says "whether bonuses are included in normal holiday pay depends on the nature of the bonus", and its main holiday pay page says normal pay "does not usually include bonus payments". Acas gives the clearest breakdown:
| Type of bonus | Included? (Acas) |
|---|---|
| Bonus based on your individual performance | Likely included: it can be a payment linked to your contractual tasks |
| Contractual annual bonus linked only to company performance | Unlikely to be included |
| Discretionary fixed-sum bonus paid to all workers, such as an end-of-year bonus | Unlikely to be included |
Where an annual bonus does count, Acas says to divide it by 52 and add that amount to basic pay when working out a week's holiday pay.
How is the 52-week reference period worked out?
The extra payments are averaged per week over a reference period and added to a week's pay (regulation 16(3ZB) to (3ZG)):
- 52 weeks ending with the week your holiday starts, or the last complete week before it.
- Weeks with no pay are skipped, and so are weeks with sick leave or statutory leave such as maternity. Earlier weeks are used instead to get as close to 52 as possible.
- No further back than 104 weeks.
- Under a year's service? Use the complete weeks you have worked.
- A week ends on Saturday, unless you're paid weekly on a different day.
For workers with fixed hours, Acas adds that holiday pay received during the reference period isn't counted in the average. For irregular-hours and part-year workers it is the opposite: holiday pay in the reference period is included.
Worked example: overtime, commission and a bonus
Greta works fixed hours in sales for £500 a week basic. Over the last 52 paid weeks she received:
| Payment | Total over 52 weeks | Weekly average | In normal pay? |
|---|---|---|---|
| Basic pay | £26,000 | £500 | Yes |
| Overtime, most weeks | £3,120 | £60 | Yes: regularly paid |
| Commission | £5,200 | £100 | Yes: linked to her contractual tasks |
| Annual bonus for her own sales targets | £2,600 | £50 | Likely yes: individual performance |
| Company-wide fixed Christmas bonus | £300 | — | Unlikely |
- A week of the 4 weeks' leave: £500 + £60 + £100 + £50 = £710.
- A week of the 1.6 weeks' leave: at least the £500 basic, unless her employer pays all 5.6 weeks at the normal rate.
On a 5-day week, that is 20 days at £142 a day and 8 days at a minimum of £100 a day. If her employer paid all 28 days at basic, she would lose £42 for each of those 20 days, or £840 over the year.
What should employers check?
- Payroll rules: that overtime, commission and status payments feed into the holiday rate for at least 20 of the 28 days, using the 52-week average.
- Which pot is used first: if you pay two rates, write down which days are paid at normal pay and tell staff.
- Records: Acas notes that from 6 April 2026 employers must keep records of annual leave and holiday pay, including what holiday pay is made up of, such as bonuses or commission.
- Leavers: untaken statutory holiday is paid when someone leaves; see being paid for unused holiday when you leave a job.
Payroll does the pay calculation, but it needs to know which days were holiday. Absenca records every approved day off, the leave type and the remaining balance, so payroll gets a clean list each period. The Free plan covers up to 10 people. To check how many days someone is due in the first place, try the annual leave calculator or our guide to calculating annual leave entitlement.
FAQ
Does holiday pay include voluntary overtime?
The regulations don't separate voluntary from compulsory overtime. The test is whether overtime payments have been regularly paid to you in the 52 weeks before your holiday. Regular voluntary overtime can meet it.
Can my employer pay holiday at basic rate only?
Not for all of it. At least 4 weeks (20 days on a 5-day week) must be paid at normal pay including regular overtime, commission and status payments. The remaining 1.6 weeks can be paid at basic. For irregular-hours and part-year workers, all statutory leave is paid at normal pay.
Is holiday pay based on the last 12 weeks or 52 weeks?
52 weeks. Regulation 16 now uses 52 paid weeks, looking back no more than 104 weeks. Guidance that mentions a 12-week period is out of date.
Does holiday pay include allowances or shift premiums?
Payments for seniority, length of service or professional qualifications are included in the 4 weeks. GOV.UK also says premium-rate shifts you work every week should be reflected even in basic holiday pay.
This is general guidance on the UK rules as of 2026. Rules change and individual situations differ, so check the official GOV.UK, Acas and legislation.gov.uk sources before making decisions.