Holiday pay in settlement agreements (UK)
Accrued holiday on termination, how it is often wrapped into exit packages, and what to check before you sign.
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Accrued leave
When employment ends, you are normally entitled to pay for holiday you have accrued but not taken. Your contract and the Working Time Regulations framework set the baseline. Settlement agreements should state how holiday is calculated and paid.
Carry-over and caps
Special rules can apply to carry-over in sickness or where leave could not be taken. If your employer disputes the amount, raise it during negotiation.
Link to final payment
Holiday pay is often wrapped into the overall lump sum—check that the figure still reflects your true entitlement after tax considerations alongside other payments.
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