How Long Does My Employer Have to Give Me My Final Pay?

‍‌​‌‌‌​​​​​‌‌‌​‌‌‌‌‌‌‌‌‌​​​‌‌‌​​‍# 1.19, How long does my employer have to give me my final pay?

You've handed in your notice, or been let go, and now you're watching the calendar waiting for the money to land. Here's the honest answer: there's no law that says they must pay you within a specific number of days. But that doesn't mean they can drag it out forever.

There's no magic deadline

A lot of people expect there's a rule saying "your employer must pay within 7 days" or "14 days after your last shift." There isn't one. What actually happens is simpler than that:

Your final pay is normally processed on your next regular pay date.

So if you're paid monthly on the last Friday of the month and you leave on the 10th, your final pay should land on the usual month-end date. If you're paid weekly, it should come in the next weekly pay run after you leave.

Some employers process final pay faster, some are slower. But your next normal pay date is the benchmark. If that date comes and goes with nothing in your account, that's when the clock starts ticking on your rights.

What should be in your final pay

Your final payslip should include everything you're owed, not just the last few days. Here's the full list:

Pay for hours or days worked up to and including your last working day. Obvious, but worth checking, make sure the dates and hours match.

Accrued but untaken holiday pay. This is a statutory right under the Working Time Regulations 1998. Your employer must pay you for any holiday you've built up but not taken. They cannot refuse this, write it off, or pretend it doesn't exist. It's the law.

Notice pay. If you worked your notice period, you get paid for it as normal. If your employer told you to leave immediately and your contract has a payment in lieu of notice (PILON) clause, they pay you for the notice period without you working it. If there's no PILON clause but they send you home anyway, you're still entitled to notice pay.

Outstanding expenses, bonuses or overtime. If you submitted expense claims, earned a bonus that's already been confirmed, or worked overtime that hasn't been paid yet, it should all be in there.

Commission or CIS payments due. If you're owed commission on work already completed, or CIS-taxed payments for work done before your leaving date, those need settling too.

What they can legally deduct

Your final pay won't be gross, they'll take things off it, just like any other payslip. The legal deductions are:

• Tax and National Insurance · as normal.
• Student loan repayments · as normal.
• Contractually agreed deductions · for example, a training clawback clause. But this only holds up if you signed an agreement before the training took place. Under section 13 of the Employment Rights Act 1996, a deduction from wages is only lawful if it was agreed in advance in writing or required by law.
• Genuine overpayments · if they accidentally overpaid you in a previous month, they can recover a reasonable amount. But they can't just invent a number.
• Court orders · attachment of earnings, child maintenance orders, etc.

For the full breakdown of what can and can't come out of your wages, see guide 3.22.

What they cannot do

This is the bit that catches people out, because some employers try it on, especially smaller outfits where the boss is making the rules up as he goes:

Withhold all final pay as leverage. "We'll pay you when you return the van keys / uniform / laptop." No. They can chase you separately for company property, but they cannot hold your wages hostage. That's an unlawful deduction under ERA s.13.

Dock pay for damage without a prior written agreement. If you accidentally cracked a windscreen on the work van, they can't just take £500 off your final pay unless there's a signed agreement in place that specifically allows it, and even then it has to be reasonable.

Refuse to pay accrued holiday. This is a statutory right under the Working Time Regulations. It is not discretionary, it is not a favour, and "company policy" does not override it. If you've built up holiday and not taken it, you get paid for it. End of.

Pay below National Minimum Wage. After all lawful deductions, your pay for the hours worked in that final period must still not drop below NMW. If deductions drag you below the floor, the deductions are unlawful to that extent.

CIS subcontractors, different rules

If you're on CIS as a subcontractor, the employment rules above don't apply to you in the same way. You're not an employee, so the Employment Rights Act protections on deductions (ERA s.13) don't cover you.

Your final payment is governed by your subcontract terms. Whatever you agreed, whether that's a written subcontract, a text message, or a handshake, that's what determines when and how much you get paid.

If they won't pay, it's a contract dispute. You don't go to an employment tribunal. You go through adjudication (if it's a construction contract under the Construction Act) or the county court. Different route, different rules.

CIS tax deductions still apply on your final payment. If your contractor is registered for CIS, they'll deduct CIS tax as normal, 20% if you're registered, 30% if you're not. That doesn't change just because it's your last payment.

If you're not sure whether you're genuinely self-employed or actually an employee being called a subbie, see guide 3.4.

P45, when should you get it?

Your P45 is the form your employer gives HMRC (and you) when you stop working for them. It shows your tax code, your earnings so far that tax year, and the tax you've paid.

Your employer must give you a P45 on the day you leave or as soon as possible after. HMRC's guidance says "without unreasonable delay", in practice, most employers issue it within a couple of weeks at most.

You need it for:

• Your next employer, so they put you on the right tax code from day one.
• Claiming benefits (Jobseeker's Allowance, Universal Credit) if you're out of work.
• Your own records for self-assessment if you go self-employed.

If they won't give you a P45: Don't panic, but don't let it slide. Chase them in writing first. If they still won't hand it over, call HMRC's employer helpline on 0300 200 3200 and they'll sort it from their end. Your new employer can use a starter checklist instead in the meantime, but you may end up on an emergency tax code until it's resolved.

Holiday pay calculation on termination

This trips people up, so here's how it works:

Statutory entitlement: 5.6 weeks per year (28 days if you work 5 days a week). This is pro-rated if you haven't worked the full holiday year.

The calculation:

(Days you're entitled to in the full year / 12) x months worked in the current holiday year - days already taken = days to be paid

Example: You work 5 days a week, so you get 28 days holiday per year. You leave 6 months into the holiday year and you've taken 8 days.

(28 / 12) x 6 = 14 days entitled so far 14 - 8 taken = 6 days to be paid

Those 6 days should appear on your final payslip at your normal daily rate.

One more thing: your employer cannot force you to "use up" your remaining holiday during your notice period unless they give you the correct notice to do so, which is double the length of the leave they want you to take. So if they want you to use 5 days of holiday, they need to give you 10 days' notice of that requirement.

What to do if they don't pay

If your final pay date has passed and nothing has landed, here's the step-by-step:

Step 1: Put it in writing. Email or letter, not just a phone call. Keep it factual:

"Please confirm when my final pay, including accrued holiday pay, will be processed. My last working day was [date] and I have not received payment on the expected pay date of [date]."

Step 2: Cite the law if deductions look wrong. If they've taken money off that shouldn't be there, reference ERA s.13 (unlawful deductions from wages). You don't need to be a lawyer, just naming the section shows you know your rights.

Step 3: Call Acas. Ring 0300 123 1100. Free, confidential, and they deal with this stuff every day. They'll tell you where you stand and what to do next.

Step 4: Acas Early Conciliation. If it's not resolved, you must go through Acas Early Conciliation before you can make a tribunal claim. This is mandatory, you can't skip it. Acas will try to broker a settlement between you and your employer.

Step 5: Employment Tribunal. If conciliation doesn't work, you can make a claim. The deadline is 3 months less 1 day from the date the pay was due. Miss that deadline and you're usually out of luck, so don't sit on it.

For CIS subcontractors: The tribunal route doesn't apply. Your options are adjudication under the Construction Act (if it applies to your subcontract) or a county court claim for breach of contract. See guide 1.4 for the adjudication route.

What to do next

• Check your contract or written terms for any PILON clause, training clawback, or specific final pay provisions.
• Work out your accrued holiday using the calculation above so you know what to expect.
• If your final pay date passes with nothing, put it in writing immediately · don't wait weeks hoping it'll sort itself out.
• Keep copies of your last few payslips, your contract, and any emails about your leaving date. You'll need them if it goes further.

Sources

• Employment Rights Act 1996, sections 13–27 (Protection of wages) · Unlawful deductions from wages, including final pay
• Employment Rights Act 1996, sections 86–91 (Rights on notice) · Minimum notice periods and rights during notice
• Working Time Regulations 1998 · Statutory holiday entitlement and payment for accrued holiday on termination
• Income Tax (Pay As You Earn) Regulations 2003 · P45 requirements on cessation of employment

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