How accrued holiday is calculated on termination

The formula

accrued_days = (annual_entitlement × days_worked_in_leave_year / 365)
               − annual_leave_days_already_taken

Variables

• annual_entitlement — the employee's annual leave allowance from their active leave policy (typically 25 days)
• days_worked_in_leave_year — calendar days between leave-year start and termination date
• leave-year start — tenant setting (most common: 1 January or contract anniversary)
• annual_leave_days_already_taken — sum of approved Annual-leave-policy bookings within the leave year

Worked example

• Employee starts 1 May 2026, terminates 30 September 2026
• Annual entitlement: 28 days
• Leave year: 1 January (started before employment — pro-rated)
• Days worked in leave year: 153 (1 May → 30 Sep)
• Has taken: 6 days

Accrued = 28 × 153/365 = 11.74 days Owed = 11.74 − 6 = 5.74 days

At a daily rate of £45,000 / 260 = £173.08, pay-out = £993.46

Edge cases handled

• Bank holidays — statutory bank holidays already accounted for as non-deductible from balance (skipped automatically when employee booked leave over a bank holiday)
• Public-holiday region override — uses the employee's override if set, else tenant default
• Mid-year leave-policy change — uses the policy active at termination date
• Negative accrued (took more than earned) — UI shows 0 days owed by default. Recovery from final pay must be contractually permitted; flip the "Recover overspent leave" toggle if your contract allows

Where it shows

Employee detail > Offboarding tab > Accrued holiday section. Live-updates as you change the proposed termination date.

The pay-out amount goes into the Final pay run as an additional line item alongside the pro-rated salary for the part-period worked.