Holiday pay at umbrella companies explained

So you’ve chosen to work through an umbrella company? Great! That’s your tax compliance sorted and hours of admin saved. But what about holiday pay? 

With evidence of certain umbrella companies illegally withholding holiday pay in the past, it is important to know what you’re entitled to. 

Carry on reading for everything you need to know about holiday pay at umbrella companies. 

How does it work? 

When working through an umbrella company, contractors wll have an agreed rate which is also inclusive of their holiday pay. This holiday pay is then accrued based on the days/hour worked. 

How much holiday will I get? 

Statutory holiday entitlement in the UK is 28 days (5.6 weeks). Your employer will decide whether or not to include bank holidays as part of this.

Your holiday will be calculated on a pro-rata basis if you, for example, work fewer than 5 days a week or on a 5 month contract. 

How is it worked out? 

Typically, the percentage used to work out holiday pay is 12.07% of your hourly rate. This is worked out by dividing the required annual leave (5.6 weeks) by the remaining weeks (52 weeks – 5.6 weeks = 46.4 weeks). 5.6 / 46.4 weeks = 12.07%. 

Holiday pay will be displayed on each of your payslips. 

At Mint Umbrella, we give contractors the option to bank holiday pay, with the freedom to opt out at any time. If you work through us you can also choose whether to accrue your holiday or receive holiday pay every time you are paid.

Remember, it is crucial for your mental health to use all of your holiday entitlement and we highly encourage all of our contractors to do so. 

Fancy working with us? Contact our friendly team today via [email protected] to get started or give us a call on 0203 967 6846.