On leaving employment, an employee may get accrued holiday pay, eg so much for each month they have been with the employer in a 12-month period.
If the employee’s contract of service ends at the time they stop work (whether or not they then take a holiday), the employer should not treat the accrued pay as holiday pay. The employer must:
If an employee, on leaving employment, receives their final 2 weeks’ ordinary wages, together with an amount representing their accrued holiday pay entitlement (but not ranking as holiday pay because of the ending of the employment) aggregate the latter amount with whichever of the payments of ordinary wages for the final 2 weeks would normally fall to be paid in that tax week.
If the contract continues until the employee has had a period of holiday after finishing work, the employer should regard the additional payment as holiday pay and treat it as such. The basis of this distinction is that a person cannot be on holiday from an employment after that employment has ended.
The normal rules apply to holiday payments made after State pension age, see NIM36000.