Is Your Umbrella Company Withholding Your Holiday Pay?

Start with the payslip, not the argument

The single most common mistake supply teachers make in this situation is to open with the argument. You ring the umbrella, you say you think your holiday pay is wrong, they say it is all included in your rate, and the conversation ends there with nothing written down and nothing resolved. The people on the other end of that phone handle this call several times a week and have a script for it.

Open with the document instead. Since the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426) took effect for leave years beginning on or after 1 April 2024, an umbrella company paying rolled-up holiday pay has no discretion about how it presents it. The payment must appear on the payslip as a separate, clearly itemised payment. That requirement is not cosmetic. It exists precisely so that a worker can look at a piece of paper and see, without asking anyone, whether they have been paid. It converts a matter of assertion into a matter of arithmetic.

So the first question is never “am I getting my holiday pay?” It is: does the payslip contain a separately identified holiday pay amount, and what number is it? There are only three possible answers, and each takes you somewhere different.

Six warning signs, and what each one means

Withheld holiday pay is rarely a single dramatic event. It is usually one of a small number of recurring patterns, each of which produces a slightly different-looking payslip. Working out which pattern you are looking at matters, because it determines what you ask for.

• No separate holiday pay line anywhere on the payslip. The day rate is described as inclusive of holiday pay and there is nothing to inspect. This fails the itemisation condition outright, and it means there is no record of any holiday payment having been made.
• A separate line that computes to 10.77%, or some other under-rate. The umbrella has divided 5.6 weeks by 52 rather than by 46.4. The percentage looks plausible and the shortfall is about 1.3 percentage points of everything you earn — small each week, several hundred pounds a year.
• Holiday pay accrued into a pot that is never paid out. The payslip shows a balance building, you never receive it, and when the assignment ends the balance quietly disappears. This is the classic withholding pattern, and it is why you should save the payslip showing the balance every single pay period.
• Rolled-up holiday pay applied to a worker who is neither an irregular hours nor a part-year worker. A long-term booking on a fixed timetable may fall outside both statutory definitions. If it does, rolling up is unlawful even if the 12.07% arithmetic is immaculate — the money should be calculated on a 52-week reference period and paid when leave is taken.
• A retained holiday balance declared forfeited at the end of the leave year. Ask, in writing, for the contractual provision being relied on, the opening and closing balance, and every payment made out of it. An unexplained deletion of a balance is not an administrative rule.
• The 12.07% applied after the umbrella’s own deductions. The statutory test is a percentage of your total pay for work done in the pay period. Calculating it on a figure net of the umbrella’s margin, employer National Insurance and the Apprenticeship Levy applies the right rate to the wrong base, and produces an under-payment that passes a superficial check.

The fourth and sixth of those are the ones almost nobody catches unaided, because in both cases the number on the payslip survives the obvious test. A correct percentage applied to the wrong base, or a correct calculation applied to the wrong kind of worker, looks exactly like compliance. This is the strongest practical argument for asking the umbrella for a written reconciliation rather than simply asking “is it 12.07%?” — the reconciliation forces them to state the base figure and the legal basis, and it is in those two disclosures that the problem usually surfaces.

Gather the evidence before you complain

Do this first, and do it today, for a blunt practical reason: payslip portals are routinely switched off the moment an engagement ends, and umbrella companies in dispute are not always swift about restoring access. Reconstructing a year of payslips from a company you are arguing with is an order of magnitude harder than downloading them this evening.

• Every payslip you can access, downloaded as PDFs and saved outside the umbrella’s portal, in date order. Not screenshots of a screen — the actual documents.
• Your Key Information Document, which the agency was required to give you before you agreed terms, and which must state your annual holiday entitlement and how holiday pay is dealt with. If the KID says one thing and the payslips do another, that discrepancy is a strong point.
• Your contract with the umbrella company, including any assignment schedules or booking confirmations. This is the document that decides whether you are an irregular hours worker, a part-year worker, or neither.
• A simple spreadsheet with one row per pay period: date paid, days worked, pay for the work, holiday pay shown, and the percentage that produces. The running total of the shortfall is the number that makes people act.
• Every email or message in which the agency or umbrella described how holiday pay would work, including the informal ones. A recruitment consultant’s casual reassurance in a WhatsApp message is still evidence of what you were told.
• A dated note of any phone conversation — who you spoke to, when, and what they said. Contemporaneous notes carry real weight and cost nothing to make.

The spreadsheet is the piece that does the heavy lifting. A complaint that says “I think my holiday pay is wrong” invites a scripted reply. A complaint that says “across the 24 pay periods listed in the attached schedule, holiday pay was paid at an average of 10.77% of the pay for the work, producing a cumulative shortfall of £X” invites a calculation in response. The second one gets escalated internally; the first one gets answered by whoever picks up the phone.

The escalation ladder, step by step

Work these in order. Skipping straight to a tribunal is almost always the wrong move — not only because the earlier rungs are far quicker and cheaper, but because a tribunal will expect to see that you raised the matter with your employer first. The overwhelming majority of these disputes are resolved at step one or step two.

Time limits: a regime change 13 days away

This section needs unusual care, because the law is changing within a fortnight of this page being written and the two regimes produce very different answers.

As at today, 18 September 2026, the time limit for an unlawful deduction from wages claim — which is how an unpaid or under-paid holiday pay claim is normally brought — is three months less one day from the date of the deduction. For holiday pay, the date of the deduction is the date the under-paid wage was actually paid to you. It is not the date you noticed, not the date you complained, and not the date the umbrella finally replied to you.

From 1 October 2026 — under section 152 of and Schedule 12 to the Employment Rights Act 2025 — the limit for most employment tribunal claims rises to six months less one day. Breach of contract claims are the notable exception and remain at three months less one day. That change is thirteen days away as this guide is published, which creates a genuinely awkward window.

The reason this is so unforgiving is that each under-payment has its own deduction date. If you have been under-paid on every payslip for a year, you do not have one deadline — you have as many deadlines as you have payslips, and the oldest ones start expiring first. Delay does not risk your whole claim at once; it erodes it from the back.

Acas early conciliation stops the clock

Because the deadlines are short, the clock-stopping effect of Acas notification is the most important procedural fact on this page. The mechanics work like this:

• You notify Acas of your dispute. From that moment the time limit is paused.
• The early conciliation period runs. It was extended from 6 weeks to 12 weeks from 1 December 2025 by the Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) (Amendment) Regulations 2025, so there is now substantially more room to negotiate than there used to be.
• When conciliation ends, Acas issues an early conciliation certificate and the clock restarts.
• If the original deadline has already passed, or falls very soon after the certificate, you get at least one month from the date of the certificate to lodge your claim.

The practical upshot is that notifying Acas is close to a free option. It does not commit you to a tribunal claim, it does not cost anything, it does not require you to have decided what you want, and it converts a deadline that might be days away into one that is at minimum a month after the certificate. If you take one action from this guide while you are still working out whether you have a case, make it this one.

A series of deductions, and the two-year backstop

Holiday pay under-payments are almost never one-offs. They are the same error repeating on every payslip, which raises the question of whether you can claim for the whole run or only for the most recent instalment. The law treats linked repeated under-payments as a series of deductions, and time runs from the last deduction in the series — which is what makes a long-running error claimable at all.

For years that principle was hobbled by case law holding that a gap of three months or more between under-payments automatically broke the series, so a single compliant payslip in the middle of a bad run would sever everything before it. That approach was overturned by the Supreme Court in Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33, decided on 4 October 2023. The Court held that a gap of three months or more does not automatically break the chain where the deductions are factually linked by the same underlying cause. For a supply teacher whose umbrella has applied 10.77% for two years with gaps in the middle for school holidays, that reasoning is directly helpful: the gaps are a feature of the working pattern, not evidence that the error stopped and restarted.

So the realistic frame for a supply teacher in England or Wales is: the series argument lets you sweep up a run of linked under-payments rather than just the last one, and the two-year backstop is the ceiling on that sweep. Two years of a 1.3-percentage-point shortfall on £24,000 a year of work is still in the region of £600, which is a meaningful sum, but it is not the open-ended historic claim some summaries imply.

What this actually costs you in time and stress

It would be easy to end this page on the tribunal and leave the impression that litigation is the natural destination. It is not, and it would be dishonest to imply otherwise.

In practice the overwhelming majority of holiday pay disputes with umbrella companies are resolved at step one or step two. A specific, documented, well-calculated reconciliation request tends to produce either a correction or an explanation, and both are useful outcomes. Errors at this scale are frequently genuine — a payroll template applying the wrong divisor across an entire book of workers is a configuration mistake, not a conspiracy — and companies correct genuine errors when they are shown the arithmetic in writing, particularly now that agencies have their own liability reasons for caring.

Be realistic about the effort, though. Step one takes an evening to prepare properly and then a fortnight of waiting. Step two is another email and another fortnight. A union caseworker will move faster than you can but still works in weeks, not days. Acas early conciliation now runs up to twelve weeks. A tribunal claim, if it goes that far, is measured in many months and requires you to keep a file organised and respond to correspondence throughout. For a sum of a few hundred pounds, that is a real and personal cost, and nobody should tell you it is trivial.

There is also the part that no legal guide can resolve for you: agency supply work is discretionary, and the worry about being quietly dropped down a call list for being difficult is not irrational. Two things genuinely help. Keep it administrative in tone — a reconciliation request is a routine query about a payroll calculation, not an accusation, and writing it that way is both more accurate and more effective. And keep the umbrella dispute separate from the agency relationship until you need the agency's help, at which point you are bringing them information about a supplier rather than a complaint about themselves.

If you are still working for them

A short set of things worth doing while the engagement is live, regardless of whether you decide to escalate anything:

• Download every payslip now and store them somewhere that is not the umbrella’s portal. Access disappears when engagements end.
• Check the holiday line on every payslip, not once. A percentage can change without notice when a payroll system is updated, and catching it in the month it happens is far easier than reconstructing it a year later.
• Ask which worker category you are in, in writing, at the start of any long-term booking on fixed hours. It is a perfectly ordinary question to ask before an assignment begins and a much more loaded one to ask a year in.
• Read the Key Information Document against your first payslip. If the net figure in the representative example is materially different from what actually arrived, ask why straight away.
• Note the date your leave year begins. It drives the accrual position, the forfeiture question, and which regime applied when.
• Join a union if you have not. The casework support is the single most useful thing available to a supply teacher in a pay dispute, and it is not retrospective.

And if the underlying question is whether the 12.07% should be applying to you in the first place — rather than whether it has been calculated correctly — that is a question about your contract and the statutory definitions, covered in full in the rolled-up holiday pay guide. For the wider picture of where holiday pay sits in the chain between the assignment rate and the money in your account, see supply teacher pay explained, and use the teacher take-home pay calculator to model what a corrected gross figure is actually worth to you after tax and National Insurance.