NHS Holiday Pay and Regular Overtime Explained

If you regularly pick up extra shifts or overtime, a week of annual leave should not mean a drop in pay to just your basic salary. The rule that stops that is short, but it took litigation to get it applied consistently. This guide sets out the current Handbook wording, the law, the 2021 England deal, and how to test your own payslip. For how overtime itself is paid, see NHS overtime rates explained, and for annual leave entitlement see annual leave entitlement explained.

The Handbook rule: paragraph 13.9

Section 13 of the NHS Terms and Conditions of Service Handbook says:

• Pay during annual leave will include regularly paid supplements, including any recruitment and retention premia, payments for work outside normal hours and high cost area supplements.
• Pay is calculated on the basis of what the individual would have received had they been at work.
• For staff with regular hours, the reference period is the previous three months at work, or another period agreed locally.
• For staff with irregular hours, from 6 April 2020 the reference period is the last 52 weeks, limited to looking back no further than the previous 104 weeks from when leave begins.

Section 2 (unsocial hours) confirms that pay during annual leave is set out in paragraph 13.9. The text is deliberately general: it does not use the word overtime, but "payments for work outside normal hours" and "what the individual would have received had they been at work" were the wording at the centre of the litigation below.

What the law says

The government's guidance on holiday pay says a worker's normal rate of pay includes commission, regular overtime payments and payments related to length of service or professional qualifications, but not usually bonuses. It uses the last 52 weeks, counting back up to 104 weeks, to find the average, and says employers must pay at least four weeks of statutory leave at the normal rate of pay and the remaining 1.6 weeks at the basic rate. The NHS Handbook goes beyond the statutory split by applying paragraph 13.9 to pay during annual leave under the NHS contract. Source: gov.uk, Holiday pay.

The 2021 England corrective payments

The framework agreement of 12 March 2021 was made against the background of the case of Flowers v East of England Ambulance Service NHS Trust, which concerned paragraph 13.9 and how overtime is treated in holiday pay. The framework records that the Employment Appeal Tribunal and Court of Appeal held that payments for regular voluntary overtime were to be included, and that implementation across NHS organisations in England had been inconsistent. Its key terms:

NHS Employers' guidance on the framework says that from 1 April 2021, employers should include regularly worked overtime and additional standard hours in the calculation of pay during annual leave, and that no further corrective payments will be made for the earlier periods. The framework also says that its four-month test was agreed for its own purposes and is not a general definition of regular overtime. Sources: NHS Staff Council framework and NHS Employers guidance.

Worked example: leave pay for someone who regularly does overtime

Take a full-time Band 5 nurse at the bottom of the band (£32,073 in 2026/27, about £16.40 an hour on the 37.5-hour week). They work 37.5 contracted hours and, on average, 7.5 hours of agreed overtime a week at time and a half (the Section 3 rate for hours beyond 37.5, excluding public holidays).

If this nurse takes four weeks of leave in a year and none of it reflects the overtime, the gap is about £738 before tax. If the overtime only happens in some weeks, the average over the reference period is lower, but the principle is the same: your leave pay should resemble what you would normally have earned. The figures are illustrative: your trust's method, reference period and whether pay is averaged over weeks or hours will change the result. Overtime is calculated on basic pay plus long-term recruitment and retention premia, and unsocial hours are paid separately, not within the overtime rate (Handbook 2.15 and 3.2).

Reference periods: the last 12 weeks or the last 52?

The Handbook uses two methods depending on whether you have regular hours. If your hours are regular, the default is the previous three months at work, or another period agreed locally. If they are irregular, it is the last 52 weeks, with a 104-week look-back limit when you have had weeks without pay. Most substantive staff on a fixed rota fall in the first group even if their rota rotates, but how a trust classifies a person with a mix of fixed and extra shifts is a local matter, and one reason payslips differ between colleagues. The practical point is to ask which period was used, and whether it covered your typical overtime.

Bank staff and the 12.07% supplement

The framework applied to work under a substantive contract, not NHS bank shifts. Bank workers' holiday pay is commonly paid differently. One trust's payslip guide describes a "WTD pay" line for bank staff: a supplement equivalent to 12.07% of basic pay and enhancements representing statutory holiday entitlement. That is also the proportion gov.uk gives for accruing leave for irregular-hours workers. If you work both a substantive post and bank shifts, they are treated separately. Compare the two in our bank vs substantive post guide.

How to check your own leave pay

• ✓ Find a payslip for a month with a week of leave and the leave pay line (often labelled as AfC absence or annual leave)
• ✓ Note the reference period the trust says it used (three months or 52 weeks)
• ✓ Add up your usual weekly overtime, additional hours and enhancements over that period and divide by the number of weeks
• ✓ Compare that average with the pay shown for the leave week
• ✓ If it is materially lower, ask payroll for the calculation in writing and quote paragraph 13.9
• ✓ If you have been in post since before 1 April 2021 and believe you missed the corrective payment, ask payroll and your union to check eligibility

Our NHS Payslip Checker and the payslip codes decoder help you find the right lines and understand the leave pay codes on your slip.

Wales, Scotland and Northern Ireland

The March 2021 framework covers NHS employers in England only. Paragraph 13.9 is in the Handbook that applies to all four nations, but arrangements for corrective payments and local implementation were agreed separately in the other nations, and we have not verified their detail. If you work in Wales, Scotland or Northern Ireland, check with your health board or trust and your union for the position that applies to you.