The formula
How to calculate vacation payout
On leaving a job you are entitled to be paid for holiday accrued but not taken. Entitlement builds through the leave year, so a leaver in month seven has accrued roughly seven twelfths of the annual allowance.
The daily rate is normally annual salary divided by 260 working days, though some contracts use 365 or a formula based on weekly pay. Check the contract, as the difference is significant.
The inputs, one by one:
- Annual salary
- Annual holiday entitlement (days)
- Months into the holiday year (months)
- Days already taken (days)
Everything recalculates as you type, and the numbers in the address bar update with it, so a link to this page carries your figures with it.
Where a figure is not immediately to hand — a precise interest rate, an exact balance — a reasonable estimate is a perfectly good starting point. Because every result updates instantly, refining a rough guess into the real figure once you have it takes a moment, and nothing about the calculation depends on getting it exactly right on the first attempt.
Why vacation payout matters
A calculation like this usually gets used at a decision point rather than out of curiosity — comparing two real options, checking a number a lender or adviser has quoted, or working out whether a plan that sounded fine in conversation still holds up once it is written down with actual figures. The maths itself is rarely complicated; what is hard is remembering which figures to use and in what order, which is exactly what a dedicated calculator is for.
It is also useful as a sense check before signing anything. A quote, an offer letter or a spreadsheet from someone else can contain an error, an optimistic assumption, or simply a different convention for rounding — running the same inputs through an independent calculator is a quick way to confirm a number before relying on it.
It is also worth being clear about what a single figure like this can and cannot settle on its own. It answers the specific question the formula was built to answer, and nothing more — a favourable vacation payout result does not automatically mean a decision is a good one overall, since plenty of other factors that a formula cannot capture, from personal circumstances to how comfortable a commitment feels, usually matter just as much as the arithmetic. Use the number as one solid input among several rather than the whole of the decision.
Where the same calculation needs to be run for several different scenarios side by side — three loan offers, two savings plans — the fastest approach is usually to open the calculator in a second browser tab for each one, so that the results can be compared directly rather than overwriting each other in a single set of fields.
Worked example
Work through the defaults on this page:
- Annual salary: 42,000
- Annual holiday entitlement: 28 days
- Months into the holiday year: 7 months
- Days already taken: 11 days
That gives:
- Payout for untaken leave: 861.54
- Untaken days accrued: 5.33 days
- Daily rate: 161.54
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
Reading the result
A negative result means you have taken more leave than accrued. Employers can deduct the overpayment from final pay only if the contract explicitly allows it.
Where this goes wrong. Only untaken leave at termination can be paid in cash. Statutory holiday cannot be bought out during employment — the point of the entitlement is that it is taken.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
Yes, for the statutory entitlement accrued and untaken in the current leave year. Contractual leave above the statutory minimum depends on what the contract says.
Yes, as normal earnings — income tax and National Insurance apply, and it is generally paid through the final payslip.
The answer it gives you is payout for untaken leave. With 42,000 annual salary, 28 days annual holiday entitlement and 7 months months into the holiday year, that comes to 861.54. Change any field and the figure moves with it.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.