Final pay entitlements on leaving job

What your final pay should include

When you leave a job, whether it is a full-time career post or a part-time student job, your final pay should generally include all of the following that apply to you:

1. Wages up to your last working day, including any hours you have worked but not yet been paid for. This covers your basic pay, plus anything contractually due such as commission, contractual bonuses, or shift and overtime payments you have earned.

2. Payment in lieu of any accrued but untaken statutory holiday. Your employer must pay you for holiday you had built up but not taken by your leaving date. This applies even if you are dismissed, including for gross misconduct.

3. Notice pay, in the circumstances explained below.

4. Any other contractual payments due on leaving, for example an outstanding expenses claim, or a contractual bonus that has crystallised.

Your final payslip should still show the usual deductions of income tax and National Insurance. Being a student does not exempt you from tax or National Insurance, although if your total earnings for the tax year stay below the personal allowance you may have overpaid tax and can reclaim it later.

Unused holiday pay

The key legal points come from the Working Time Regulations 1998 and are confirmed by GOV.UK and ACAS.

Every worker, including part-time and casual student workers, is entitled to 5.6 weeks of paid statutory holiday per year, pro-rated for part-time hours. On leaving, you are entitled to be paid in lieu for any part of that statutory entitlement you have accrued during the current holiday year but not yet taken.

To work out what you are owed, you compare the holiday you had accrued up to your leaving date with the holiday you had actually taken. The difference is paid to you as part of your final pay.

If you were on irregular hours or a zero-hours or casual arrangement, holiday now commonly accrues at 12.07 percent of the hours you work, following the recent reforms for irregular-hours and part-year workers. This 12.07 percent figure reflects 5.6 weeks as a proportion of the working year. If your hours varied, your holiday pay should be based on your average pay, normally calculated over the previous 52 weeks in which you worked and were paid.

If your employer offers more than the statutory 5.6 weeks, the contract can set separate rules for that extra contractual holiday, so check your contract or staff handbook.

One important caution works the other way. If you have actually taken more holiday than you had accrued by your leaving date, the employer can only recover the overpayment from your final pay if there was a prior written agreement allowing it, usually a clause in your contract or handbook. Without that written agreement they cannot lawfully deduct it.

Notice pay

Whether you are entitled to notice pay depends on how you are leaving and what your contract says.

If you resign, you must give at least the notice in your contract, or if none is specified, at least one week once you have been employed for a month or more. If you work your notice, you get your normal pay for that period.

If your employer dismisses you, you are entitled to statutory minimum notice of one week for each complete year of employment, from two years up to a maximum of twelve weeks, with a minimum of one week once you have worked for a month. Your contract may give you more, but it cannot give you less than the statutory minimum. During a properly worked notice period you should receive your normal pay.

If the employer tells you not to work your notice but still ends your employment, they should normally still pay you for the notice period. This is often done as a payment in lieu of notice. Where the contract allows payment in lieu of notice, this is contractual; where it does not, ending employment without notice and without pay can be a breach of contract for which you could claim.

There is a special point about notice pay if you are off during notice. If you are off sick, on holiday, or on certain family-related leave during your statutory notice period, and your contractual notice is not at least a week longer than the statutory minimum, you are generally entitled to full pay for the statutory notice period rather than, for example, only sick pay. This protection can be valuable and is often overlooked.

For a short-term student job you may have very little or no notice entitlement if you have been employed for under a month, so check the length of your service and your contract.

What to check in your case

The precise answer depends on some facts you have not yet given, so check:

Your contract and any staff handbook for the notice period, holiday year dates, holiday entitlement above the statutory minimum, and any written agreement allowing deductions for overtaken holiday.

Whether you are resigning or being dismissed, and whether you are being asked to work your notice or not.

Your working pattern, because fixed-hours pay is straightforward but variable or zero-hours work needs an average-pay calculation.

How much holiday you had accrued and taken by your leaving date.

Practical next steps

1. Gather your payslips, contract, any holiday records, and details of hours worked in the run-up to leaving.

2. Work out roughly what you think you are owed for outstanding wages, accrued untaken holiday, and any notice pay, so you can compare it against your final payslip.

3. If the final pay looks wrong, raise it informally first with your manager or payroll, in writing, setting out clearly what you believe is outstanding and why. Many disputes are simply payroll errors and are resolved quickly.

4. If that does not work, raise a formal written grievance with the employer.

5. If it is still unresolved, unpaid wages, holiday pay and notice pay can be pursued as an unlawful deduction from wages or breach of contract claim in the employment tribunal. Before making a tribunal claim you must first notify ACAS to go through Early Conciliation, which is free and often resolves matters without a hearing. Be aware that tribunal claims for unlawful deductions or unpaid holiday generally must be started within three months less one day of the date the pay was due or the deduction was made, so do not delay if the amounts are significant.

ACAS provides free and impartial guidance and a helpline on final pay, holiday and notice, which is a sensible first port of call if you are unsure about the figures.

If you tell me whether you are resigning or being dismissed, your working pattern and hours, how long you have worked there, and how much holiday you have taken, I can help you estimate more precisely what your final pay should be.