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Employer responsibilities

Taxing holiday pay


Holiday pay is both pay for an employee's annual leave and pay for statutory holidays.

How to tax holiday pay

Holiday pay and pay for statutory holidays are included as earnings in the period that you actually pay them to your employees.

To determine the tax on your employees' holiday pay, you can use our online holiday pay tax calculator available under Work it out >

From 1 April 2011, employers and employees can agree to cash in a maximum of one week of annual holidays. If an employee has "cashed in" any annual leave this is treated as an extra pay.

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