Public holidays in the United Kingdom and how they affect pay
Reviewed by Mellow Editorial Team, HR & payroll content team
Public holidays in the UK do not automatically entitle workers to extra pay or a day off — what an employee receives depends entirely on what their contract says.
What "bank holiday" actually means in law
The term "bank holiday" has no special legal status when it comes to employment rights. The UK has a list of public holidays set by statute — eight in England and Wales, nine in Scotland, and ten in Northern Ireland — but employment law does not require employers to give workers these days off, nor does it require any premium pay if they do work on them.
What the law does require is that workers receive at least 5.6 weeks of statutory annual leave per year (28 days for someone working five days a week, including bank holidays). How that entitlement is structured is where contracts matter.
How contracts determine what workers get
Most UK employment contracts fall into one of two patterns:
Bank holidays included in annual leave. The contract states something like "28 days' annual leave, including bank holidays." Here, the employee has no automatic right to take a bank holiday off — if the business is open, they may be required to work it, and a day taken on a bank holiday simply uses one of their 28 days.
Bank holidays on top of annual leave. The contract states something like "20 days' annual leave plus bank holidays." Here, the employee gets the bank holidays off in addition to their 20 days. This is more generous and is common in office-based roles.
Neither arrangement is legally superior, provided the total entitlement meets the 5.6-week statutory minimum. However, contracts must be applied consistently. If a worker is required to work a bank holiday, they are entitled to a substitute day off (or pay in lieu, depending on what the contract specifies) only if the contract expressly provides for it.
Pay for working on a public holiday
There is no statutory right to enhanced pay — such as time-and-a-half or double time — for working on a public holiday. Any premium rate exists only because the contract, a collective agreement, or custom and practice at that workplace has created it.
If your contracts are silent on enhanced rates, you are not legally obliged to pay extra. That said, many employers do offer a premium to attract workers on popular holidays, particularly in retail, hospitality and healthcare. If you have historically paid a premium without it being in writing, custom and practice case law means that removing it without agreement could be treated as an unlawful deduction from wages — so it is worth making sure your written terms reflect what you actually do.
Part-time workers and pro-rata entitlement
The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 require that part-time employees are not treated less favourably than comparable full-time employees. In practice, this means bank holiday entitlement must be calculated pro-rata.
A practical complication arises with fixed-day bank holidays. Most UK public holidays fall on Mondays. A worker who never works Mondays could end up with fewer bank holidays than a Monday worker, simply because of which day they happen to work. The correct approach is to calculate their total holiday entitlement in hours or days pro-rata, and then allow them to use that entitlement on the days they choose — rather than tying entitlement specifically to the dates of bank holidays.
Payroll and reporting implications
When a worker takes a bank holiday as annual leave, it is still a paid working day for payroll purposes. Their normal salary or pay runs as usual; there is no separate payroll code required unless your payroll software distinguishes leave types for reporting.
If a worker is paid enhanced rates for bank holiday working, those additional earnings are subject to income tax and National Insurance in the normal way under PAYE. The employer contributes 13.8% employer National Insurance on earnings above the secondary threshold, and the employee pays 8% on earnings within the basic rate band. Any enhanced pay should be included in the Full Payment Submission (FPS) sent to HMRC on or before the relevant payday, as required under Real Time Information rules.
If you run payroll across different nations — for example, employing staff in both England and Scotland — bear in mind that the Scottish bank holiday calendar differs from the English one. You may need to track separate entitlement records by location to avoid either underpaying or overcomplicating leave balances.
What to check in your contracts now
Given that the Employment Rights Act 2025 has strengthened a range of day-one employment rights, it is a sensible moment to review whether your written terms accurately reflect your current practice on bank holidays. The key questions are: does your contract clearly state whether bank holidays are included in or additional to annual leave; does it specify any enhanced pay for working them; and does your approach to part-time staff genuinely deliver a pro-rata equivalent? If the answers are unclear, the written terms — not your informal practice — are what a tribunal will look at first.
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