What Happens To Unused Annual Leave When You Leave A Job?

Leaving a job comes with a surprisingly long list of things to organise. Alongside handing in your notice, agreeing a leaving date and preparing for your next role, it is important to check what will happen to any annual leave you have not used.

It is easily overlooked. Timetastic's 2026 Annual Leave Report, based on a survey of 6,000 UK respondents, found that around one in five workers (20.7%) did not expect to use their full annual leave allowance. If you leave a job with holiday remaining, it is important to understand whether you can take it during your notice period or whether it should be included in your final pay.

In most cases, any statutory annual leave you have accrued but not taken by your final day must either be taken during your notice period or paid through your final pay. However, the amount you are owed will depend on your annual entitlement, your employer's holiday year, your leaving date and how much leave you have already taken.

Key Takeaways

Accrued statutory annual leave remaining when your employment ends must be included in your final pay.
You can request holiday during your notice period, although your employer can approve, refuse or require you to take it with the correct notice.
If you have taken more holiday than you have accrued, your employer can only deduct the excess from your final pay if this was agreed beforehand in writing.
Contractual leave above the statutory minimum may follow different rules, so always check your employment contract.

Recruiter Insight: When someone secures a new role, their attention naturally shifts to handing in their notice and preparing for their next job. Their remaining holiday and final payslip can easily become an afterthought, which is why it is worth checking the figures before leaving rather than waiting until the final payment arrives.

Do Employers Have to Pay Unused Holiday When You Leave?

Yes. If you still have accrued statutory annual leave remaining when your employment ends, your employer must pay you for it. This is known as payment in lieu of holiday and should be included in your final pay.

This applies whether you resign, are made redundant or are dismissed. According to GOV.UK guidance, accrued statutory leave must still be paid even if someone is dismissed for gross misconduct.

The position can be different for any contractual leave your employer provides above the statutory minimum. Your employment contract or staff handbook should explain how additional leave is treated when you leave.

How Is Unused Annual Leave Calculated?

Most workers in the UK are entitled to at least 5.6 weeks of paid statutory annual leave each year. For someone working five days a week, this is usually 28 days, although bank holidays can be included within that figure.

If you leave part-way through your employer's holiday year, your entitlement is normally calculated on a pro-rata basis. You will need to know:

Your full annual leave entitlement
The start and end dates of your employer's holiday year
Your final day of employment
How much annual leave you have already taken

The basic calculation is:

Full annual entitlement × proportion of the holiday year employed − holiday already taken

A Simple Holiday Accrual Example

Suppose your employer's holiday year runs from 1 January to 31 December, you receive 28 days of annual leave and your employment ends on 30 June.

You will have been employed for 181 of the 365 days in that holiday year:

28 × 181 ÷ 365 = 13.88 days accrued

If you have already taken 10 days, approximately 3.88 days remain. Your employer should explain how it rounds part-days and how the resulting holiday payment has been calculated.

This is just an illustrative example. Your precise entitlement may differ depending on your working pattern, contractual terms and the way your employer operates its holiday year. The GOV.UK holiday entitlement calculator can help you check your own circumstances.

Irregular Hours and Variable Working Patterns

Holiday entitlement works differently for irregular-hours and part-year workers. Under current UK rules, statutory holiday generally accrues at 12.07% of the hours worked during each pay period.

Holiday pay for someone with irregular hours or variable pay may be based on their average earnings across the previous 52 paid weeks. Weeks in which no pay was received are not normally included, and the employer may need to look further back to find 52 paid weeks.

Because these calculations can be more complicated, ask your employer for a written breakdown if it is not clear how the figure in your final pay has been reached.

Can You Take Annual Leave During Your Notice Period?

You can request annual leave during your notice period in the usual way. However, having enough leave remaining does not automatically mean the requested dates must be approved.

Your employer may:

Approve your holiday request
Refuse or cancel the requested holiday with the correct notice
Require you to use some or all of your accrued holiday before leaving
Pay any remaining accrued statutory leave through your final pay

Can Your Employer Refuse a Holiday Request?

Yes. An employer can refuse or cancel a holiday request, including during a notice period. Unless a different arrangement has been agreed, the employer must normally give at least as much notice as the amount of leave being refused or cancelled.

For example, if five days of approved holiday are being cancelled, the employer should normally give at least five days' notice. Acas advises employers to have a good business reason and to consider the effect on the worker, particularly where travel or accommodation has already been booked.

If you cannot take the leave before your employment ends, any accrued statutory entitlement remaining on your final day must be paid instead.

Can Your Employer Make You Take Holiday?

Yes. Your employer can require you to take annual leave during your notice period. Unless your contract or another relevant agreement sets different notice requirements, they must normally give at least twice as many calendar days' notice as the number of holiday days they want you to take.

For example, an employer requiring you to take five days of annual leave should normally give you at least ten calendar days' notice.

What Happens to Pre-Booked Holiday?

Handing in your notice does not automatically cancel holiday your employer has already approved. However, an employer can still cancel approved leave by giving the correct notice.

If you have travel or accommodation booked, speak to your employer as early as possible and confirm the agreed arrangements in writing. Do not assume that previously approved holiday will automatically remain unchanged once your leaving date has been agreed.

What If You Have Taken More Holiday Than You Have Accrued?

Some employers allow workers to use their annual entitlement before they have fully accrued it. This can mean that, by the time someone leaves, they have taken more holiday than they have built up.

Your employer can only deduct the value of this excess leave from your final pay if the deduction was agreed beforehand in writing. This may be included within your employment contract, staff handbook or a separate written agreement.

If there is no prior written agreement and a deduction appears in your final pay, ask your employer to explain the contractual basis for it.

What Should Your Final Pay Include?

Your final pay should account for:

Your salary or wages up to your final day
Payment for any accrued but untaken statutory annual leave
Any holiday taken during your notice period
Any lawful, previously agreed deductions
Other payments due under your contract, such as commission or an agreed bonus

Your unused holiday payment may not always appear as a clearly labelled line on the payslip. If the figure is missing or unclear, ask your employer for a written breakdown showing your accrued entitlement, leave taken and the rate used to calculate the payment.

Bank Holidays and Contractual Leave

Employers can include bank holidays within the statutory 5.6 weeks of annual leave. Others provide bank holidays in addition to the statutory minimum.

If bank holidays form part of your overall entitlement, your employer should calculate the total leave accrued up to your leaving date. Future bank holidays are not counted individually as additional days owed after you have left.

Any holiday provided above the statutory minimum is contractual leave. Your contract may apply different rules to that additional entitlement, including how it is calculated or paid when you leave.

Overtime, Commission and Bonuses

Holiday pay is not always based on basic salary alone. Depending on how you are normally paid, regular overtime, qualifying commission and certain bonuses may need to be considered when your holiday pay is calculated.

This can be particularly relevant within the motor trade, where commission, regular overtime and performance-related earnings can form a significant part of someone's overall package. If your unused holiday appears to have been calculated using basic salary alone, ask your employer to explain which rate has been applied.

Holiday Pay Records From April 2026

Since 6 April 2026, employers have been required to keep records covering annual leave taken, leave carried over, holiday pay and payments made for unused holiday when someone leaves. These records must be retained for at least six years.

This does not remove the need to check your final pay, but it does mean your employer should have records showing how your holiday entitlement and payment have been handled.

How to Check Your Unused Holiday Pay

Confirm the holiday year. Check when your employer's holiday year begins and ends.
Check your full entitlement. Confirm how much statutory and additional contractual leave you receive, and whether bank holidays are included.
Calculate the proportion accrued. Work out how far through the holiday year your employment will end.
Subtract leave already taken. Include any holiday you will take during your notice period.
Check the relevant pay rate. Consider whether regular commission, overtime or other qualifying payments should be reflected.
Compare the calculation with your final pay. Ask for a written breakdown if the figures are not clear.
Raise any difference promptly. Contact your employer in writing and keep a copy of the calculation and response.

What Should You Do If Your Holiday Pay Looks Wrong?

Start by raising the issue directly with your employer or payroll team. It may be a straightforward calculation or payroll error that can be corrected quickly.

Set out the figures you believe should have been used and ask for a written explanation. If the matter cannot be resolved informally, follow your employer's grievance procedure.

You can also contact Acas or Citizens Advice for guidance. Strict time limits can apply to unpaid-wage claims, so seek advice promptly rather than waiting for the issue to resolve itself.

This article provides general information about annual leave and final pay in the UK. It is not individual legal advice. Your entitlement may depend on your employment status, contract and specific circumstances.

Planning Your Next Move in the Motor Trade?

Understanding your final pay is an important part of leaving well, but it is only one part of a successful career move. Perfect Placement supports automotive professionals across the UK with finding suitable opportunities, preparing for interviews and managing the move into a new role.

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Frequently Asked Questions

Am I always paid for unused annual leave when I resign?

Any accrued statutory annual leave remaining when your employment ends must be included in your final pay. If you take the leave during your notice period, you will receive holiday pay for those days instead. Contractual leave above the statutory minimum may be treated differently, so check your employment contract.

Can my employer make me take holiday during my notice period?

Yes. An employer can require you to take some or all of your remaining annual leave during your notice period. Unless a different arrangement has been agreed, they must normally give at least twice as many calendar days' notice as the number of holiday days they want you to take.

Can my employer refuse holiday during my notice period?

Yes. Your employer can refuse or cancel a holiday request with the correct notice. If this prevents you from taking all your accrued statutory leave before your employment ends, the remaining entitlement must be included in your final pay.

What if I have taken more holiday than I have accrued?

Your employer can only deduct the value of excess holiday from your final pay if the deduction was agreed beforehand in writing, such as in your employment contract or another written agreement.

How do I calculate my remaining holiday entitlement?

Confirm your full annual entitlement and calculate the proportion of the holiday year you will have been employed. Subtract any annual leave already taken, including leave due to be taken during your notice period. Your employer should be able to provide a breakdown, and the GOV.UK holiday entitlement calculator can help you check the result.

Are bank holidays included in unused annual leave?

They can be. Some employers include bank holidays within the statutory 5.6 weeks, while others provide them in addition. Check your contract to confirm how they form part of your total entitlement.

Sources and Further Guidance

About the Author

Ashley Camies
As Marketing & Automation Manager at Perfect Placement, Ashley Camies has 14 years of automotive recruitment experience. Since 2011, she has supported motor trade employers and candidates across the UK. She specialises in strengthening recruitment processes and candidate engagement, providing informed commentary on hiring trends and talent market strategy based on over a decade of sector insight.