Hi Louise C,
When calculating national minimum wage pay, a worker’s total remuneration in a pay reference period is reduced by any payments made for periods of absence from work; for example, when they are sick or on holiday.
Holiday pay should initially be included in the worker’s total remuneration. If the worker takes the holiday, then how this is treated depends on whether the worker is performing salaried hours work, time work, output work or unmeasured work. For more information, please refer to:
Calculating the minimum wage Working hours for which the minimum wage must be paid
However, if the worker does not take the holiday, the holiday pay will remain included in the total remuneration and there is no corresponding reduction when calculating National Minimum Wage pay.
Thank you.