UK: Sick leave erased my unused holiday from final pay — can I recover it?

Scenario

You leave a regular-hours job after sickness absence. Payroll removes your unused holiday, saying sick days used it up even though you did not take annual leave. You need to calculate what should be included in your last pay.

What the law says

Yes: you are owed payment for accrued, untaken statutory holiday on termination, including valid carry-over. Statutory holiday continues to accrue during sickness; sick days cannot simply be relabelled as annual leave. For a regular-hours worker unable to take leave because of sickness, up to four weeks of statutory leave can carry over and must be used within 18 months after the leave year ends. The additional 1.6 statutory weeks and extra contractual leave have different carry-over rules.

What you can claim

For regular hours, annual statutory leave is generally 5.6 × days worked per week, capped at 28 days. Accrued days = annual entitlement × proportion of the leave year employed, minus leave taken, plus valid carried-over days. Final holiday pay = payable untaken days × the applicable daily holiday-pay rate.

For fixed pay, start with normal weekly pay divided by normal working days per week. Normal remuneration, including qualifying regular overtime or commission, must be reflected for at least the four-week entitlement; the additional 1.6 weeks can use basic pay. Variable-pay calculations can require the previous 52 paid weeks, looking back up to 104 weeks. Contractual enhancements may improve this; the 12.07% irregular-hours accrual method is not the default for this regular-hours job.

What the employee can do

1. Send payroll the sickness dates, leave-year dates, termination date, leave taken and payslips. Ask for opening balance, accrual, carry-over expiry dates and the holiday-pay rate used.

2. Request corrected final pay in writing, attaching your days-and-rate calculation. If unresolved, contact Acas for early conciliation and identify a holiday-pay or unlawful-deduction claim; contractual leave needs separate checking.

3. Count the usual tribunal pay limit from the payment due or underpayment date: three months less one day if before 1 October 2026, or six months less one day if on or after it. Notify Acas before that limit and account for conciliation; an HR complaint does not pause it. A series-of-deductions claim can have additional recovery limits.

Common misconception, corrected

Paid or unpaid sickness does not automatically use up annual leave. That also does not mean every unused day from every past year remains payable without checking carry-over rules.

Matching guides

Read Check which holiday balance is payable.

Read Check final pay items and timing.