Holiday Entitlement for Agency Workers: How to Calculate What You Are Owed

Every worker in the UK is legally entitled to paid holiday, including agency workers, temporary staff, and those on zero-hours contracts. Understanding how holiday pay is calculated and paid helps you ensure you receive everything you are owed.

Your Legal Entitlement

All workers are entitled to 5.6 weeks of paid annual leave per year. For a worker doing 5 days per week, this equates to 28 days (including bank holidays). For those working irregular hours, the entitlement is calculated proportionally.

How Holiday Pay Is Calculated for Agency Workers

There are two main methods agencies use:

1. Accrual Method

Holiday is accrued (built up) at the rate of 12.07% of hours worked. For every 100 hours you work, you earn 12.07 hours of paid holiday. When you take time off, you receive pay from your accrued holiday balance.

Example: You work 40 hours per week for 10 weeks = 400 hours worked. Holiday accrued = 400 x 12.07% = 48.28 hours of paid holiday.

2. Rolled-Up Holiday Pay

Your holiday pay is included in your hourly rate as an uplift. So instead of earning £12.00/hour plus separate holiday pay, you might earn £13.45/hour with holiday pay included (£12.00 + 12.07% = £13.45). This became legal again in 2024 following changes to the Working Time Regulations.

If your agency uses rolled-up holiday pay, this must be clearly shown as a separate line on your payslip.

Checking Your Holiday Pay

To verify you are receiving the correct amount:

1. Check your contract or terms of engagement — it should state which method is used
2. If accrual: ask your agency for your current holiday balance. Calculate 12.07% of your total hours worked and compare
3. If rolled-up: check your payslip shows the holiday element separately. Multiply your basic rate by 1.1207 — this should match your total hourly rate
4. If neither method is clear, ask your agency to explain — they are legally required to

Taking Your Holiday

Key points about taking holiday as an agency worker:

• You must be allowed to take your holiday — an agency cannot refuse reasonable holiday requests
• Give adequate notice — typically twice the length of holiday requested (want 1 week off? Give 2 weeks notice)
• Holiday not taken cannot simply be lost — if your assignment ends, any untaken accrued holiday must be paid out
• You build up holiday from day one — there is no qualifying period
• Bank holidays — unless your contract specifically includes them, bank holidays are part of your 5.6 week entitlement, not additional

Common Issues

• Holiday pay not showing on payslip — if you cannot see holiday pay being accrued or included, raise this with your agency immediately
• Lower rate for holiday pay — your holiday pay rate should reflect your normal earnings, including regular overtime and premiums. Since 2024 legislation, this has been clarified
• Forced holiday during shutdowns — employers can require you to take holiday at specific times (e.g., factory shutdowns) but must give adequate notice
• Holiday not paid on leaving — any accrued but untaken holiday must be paid in your final pay

TRS Recruit operates a transparent holiday pay system. Your payslip clearly shows holiday accrual or the rolled-up element of your rate. If you have any questions about your holiday entitlement, your consultant can explain your specific arrangement.