When does overtime have to be included in holiday pay?

The Working Time Regulations 1998 specify that, when calculating a week's pay for the purposes of holiday pay, employers should include overtime payments that have been regularly paid to the worker in the previous 52 weeks.

Regular overtime must be included regardless of whether the employer is contractually obliged to offer it, or the employee is required to work it. There is no definition setting out how regularly overtime must be paid for it to be included. 

The right to be paid for regular overtime in holiday pay applies only to holiday pay for the four weeks' minimum annual leave under reg.13 of the Working Time Regulations 1998, not to the additional 1.6 weeks under reg.13A. Employers should decide their policy on how to treat the additional 1.6 weeks' statutory minimum leave and any additional contractual entitlement, but may decide to include pay for overtime in all holiday pay to avoid complicating the administration of payments.

For leave years beginning on or after 1 April 2024, the right to be paid for regular overtime also applies to all accrued annual leave for irregular hours and part-year workers under reg.15(B) of the Regulations.