Calculation of Holiday Topup

skray

Hi
I have been employed with a structured company for longer than 7 years.
From Feb'26 payslip continually until Sep'26 I have been receiving a "Holiday Topup" amount which varies by the month. I checked and found there was a Holiday Top Up paid in my Apr’25 payslip, but nothing from May’25 through to Jan’26. Also checked a few months before Apr’25 – not paid.

I enquired with People Services - their response:
Holiday top-up on a payslip usually refers to extra pay that adjusts your holiday earnings to match your regular average pay (such as including overtime or commission). you are entitled to Holiday Top Up as you work overtime. Holiday Top Up is completely separate to salary and annual leave. Please be advised that holiday top up is system driven, so where an employee has taken annual leave and also worked overtime in a certain period, they are due a “top-up”. It is classed as earnings which is included in taxable and NI-able pay, and it is a payment we have to make as per legislation.

I am entitled to annual leave of 25 days which does not have any cash value - if unutilised will lapse at end of year subject to a small carry over..
I do not work overtime regularly - but there were a few hours I worked in Mar paid in Apr, and then again in Aug paid in Sep. These payments show as Overtime payment in my payslips.
The Holiday Topup Amount in Feb'26 is highest, in Mar'26 about 22% of Feb, Apr about 33% of Feb, then Jun-Sep about 50% of Feb.

Query:
What is the formula to calculate Holiday Top Up, that is how can I check if the figures in my payslip are correct, and what is the related legislation. I am particularly curious why I was paid only once in Apr'25, but consistently since Feb'26

Thanks in advance

Woodstok2000

Holiday top-up is paid to ensure that your holiday pay for any days you take matches the average daily rate you receive when working.

As an extreme example, if you work 1 hour overtime every single day, your actual average pay would be higher than your standard daily rate. The top-up would add the 1 hour extra to any holidays you take so you still get holiday pay for the 1 hour overtime you usually work.

It is designed to stop unscrupulous employers hiring people for low hours and forcing them to work loads of overtime to avoid holiday payments.

Take a look here:

https://www.gov.uk/holiday-entitlement-rights/holiday-pay

Basically it is all done on averages, so if you have a few weeks of significant overtime it could conceivably result in you receiving a top-up for a good few months.

Savvy_Sue

I suspect the only people who can give you the formula used to calculate your topups … are the people using said formula to calculate your topups!

Woodstok2000 explains the principles behind it.