Holiday pay: calculate your average weekly pay if it varied
Published 6 April 2021
Applies to England, Scotland and Wales
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If you have been made redundant and your employer is insolvent, you can apply to the Insolvency Service (a government agency) for your redundancy related payments. One of the types of payment you can apply for is your holiday pay.
If your pay varied, we calculate your rate of pay for holiday pay based on your average pay over 52 weeks.
This is different from how we calculate your rate of pay for other redundancy related payments (such as redundancy pay and notice pay).
If you were paid a fixed salary you do not need to calculate your average rate of pay.
What you need to calculate your rate of pay
To calculate your rate of pay, you will need to know how much you earned each week for 52 weeks up to the date of your dismissal.
You need your gross pay for this calculation. Gross pay is the amount you earned before deductions such as tax and National Insurance. You will find your gross pay on your payslips. Do not use the amount that goes into your bank account.
If you do not have records of your pay for the last 52 weeks, you can get this information from HMRC.
Do not include any weeks where you were:
- on sick leave
- on maternity or paternity leave
- not provided with work by your former employer
If you do not have 52 weeks of information or if you did not work for your employer for 52 weeks, use as many weeks pay information as you have got to calculate your average pay.
If you do not have the information you need to complete the calculation, you can choose to use the figure provided by the insolvency practitioner dealing with your employers’ insolvency when you submit your claim online.
How to calculate your rate of pay
Once you know what your gross pay was for each week, add them all together and then divide the total by 52 (or the number of weeks you have available).
There are worked examples below of how to calculate a 52 week average.
Further guidance to help you claim redundancy related payments
There is further guidance and worked examples for calculating your holiday pay rate of pay on GOV.UK.
Use our redundancy payments factsheet to help you understand how to make a claim.
Further information about redundancy payments from the Insolvency Service, including what you can claim and guidance about the payments we make is available on GOV.UK.
If you know how much you were paid for each week for 52 weeks
- Add together how much you were paid for 52 weeks.
- Divide the total number by 52.
For example:
Sam worked variable hours and in the last 52 weeks had 2 weeks sick leave. To calculate Sam’s holiday pay, do not include the 2 weeks they did not work.
| week number | gross pay per week (£) |
|---|---|
| 1 | 200 |
| 2 | 300 |
| 3 to 7 | 200 |
| 8 to 19 | 300 |
| 20 | 200 |
| 21 | 0 (sick leave) |
| 22 to 32 | 200 |
| 33 | 0 (sick leave) |
| 34 to 40 | 300 |
| 41 to 48 | 200 |
| 49 to 54 | 300 |
Sam earned 200 per week for 26 weeks: 200 x 26 = 5,200
Sam earned 300 per week for 26 weeks: 300 x 26 = 7,800
Add those totals: 5,200 + 7,800 = 13,000
Divide the total by 52: 13,000 ÷ 52 = 250
Sam’s average weekly pay is £250.00
If you were paid in a different pattern (such as monthly) and had a standard hourly rate of pay
If you had a standard hourly pay but worked a different amount of hours each week, you will need records of when you worked to calculate your average number of hours per week. This will allow you to work out your average weekly pay.
- Write down how many hours per week you worked each week for 52 weeks.
- Add the total number of hours.
- Divide the total by 52.
- This will provide your average number of hours worked per week.
- Multiple your average number of hours per week by your hourly pay.
- This will provide your average weekly pay.
For example:
Robin worked variable hours but always got paid at £10 per hour. Their timesheets show how many hours they worked each week.
| week number | number of hours worked |
|---|---|
| 1 to 14 | 30 |
| 15 to 20 | 20 |
| 21 to 30 | 30 |
| 31 to 33 | 10 |
| 34 to 42 | 30 |
| 43 to 48 | 20 |
| 49 to 52 | 30 |
Robin worked 30 hours per week for 37 weeks: 30 x 37 = 1,110
Robin worked 20 hours per week for 12 weeks: 20 x 12 = 240
Robin worked 10 hours per week for 3 weeks: 10 x 3 = 30
Add the totals: 1,110 + 240 + 30 = 1,380
Divide the total by 52: 1,380 ÷ 52 = 26.5 hours
On average, Robin worked 26.5 hours per week.
Robin’s average weekly pay is 26.5 x £10 = £265.00