Can My Employer Withhold My Final Pay?

Your employer cannot hold back your final pay because you are leaving. You are entitled to the wages you earned up to your last day, payment for statutory holiday you have not taken and any notice pay due. A deduction from that pay is lawful only on the same grounds that apply to any other wages.

What your final pay must include

GOV.UK states that you are normally entitled to be paid everything you earned up to your last day. Your final pay usually includes:

1. Wages for the days you worked in your last pay period.
2. Payment for statutory holiday accrued but not taken.
3. Notice pay, where you were not asked to work your notice or your employer ended your employment without proper notice.
4. Any commission, overtime or bonus your contract says is due by your leaving date.
5. Statutory redundancy pay, if you were made redundant with two years' service.

ACAS states that you should receive your final pay on the date you are normally paid. Your employer does not need to pay you on your last day. Pay that is still missing after your usual pay date is treated as a deduction from your wages, and you can claim it.

Holiday you have not taken

Regulation 14 of the Working Time Regulations 1998 requires your employer to make a payment in lieu for statutory leave accrued but not taken in the leave year when your employment ends. GOV.UK states that employers must pay for untaken statutory leave even if the worker is dismissed for gross misconduct.

If you took more holiday than you had accrued, your employer can recover the excess only where a relevant agreement, such as your written contract, allows it. GOV.UK states that the employer must not take money from your final pay for this unless it was agreed beforehand in writing.

Notice pay

Section 86 of the Employment Rights Act 1996 sets minimum notice. After one month's service you are entitled to one week. After two years you are entitled to one week for each complete year of service, up to twelve weeks. Your contract may give you longer.

If your employer ends your employment without the notice you are owed, you have a claim for the notice pay. The exception is a dismissal for gross misconduct, where your employer may end your employment without notice. If you resign and leave without working your notice, your employer does not have to pay you for the period you did not work.

Deductions from final pay

Section 13 of the Employment Rights Act 1996 applies to final pay in the same way as any other wages. A deduction is lawful only where the law requires it, a written term of your contract you were given beforehand allows it, or you agreed in writing before the deduction. GOV.UK states that where a deduction is lawful, your employer can take the full amount owed from your final pay.

Holding back pay until you return a laptop or a uniform, or as a penalty for leaving, is an unlawful deduction unless one of these grounds applies. Section 8 of the Employment Rights Act 1996 gives you the right to an itemised payslip at or before the time of payment. It must show the gross pay, each deduction and its purpose, and the net pay. Your employer must also give you a P45.

An example and your time limit

A recruitment consultant with fourteen months' service resigns and works her one month's notice. Her final payslip shows no pay for the last two weeks and nothing for six days of untaken holiday. Her employer says it is holding the money until she returns her laptop. Her contract contains no term allowing a deduction for unreturned equipment. The missing wages are an unlawful deduction under section 13 of the Employment Rights Act 1996, and the holiday payment is due under regulation 14 of the Working Time Regulations 1998.

Acas states that time limits for employment tribunal claims increased from 3 months to 6 months on 1 October 2026. The 3 month limit may still apply to problems that started before 1 October 2026. Check your deadline early and seek advice. For breach of contract claims in Scotland, the six month limit applies from 9 November 2026.

What to do next

1. Check your final payslip against your contract, your last pay period and your holiday record.
2. Work out your accrued holiday for the leave year and the days you took.
3. Write to your employer listing each sum you are owed and asking for payment by a fixed date.
4. Ask in writing for the legal ground for any deduction shown on your payslip.
5. Raise a written grievance if the money is not paid.
6. Start ACAS Early Conciliation well before your tribunal deadline.

Keep your contract, final payslip and holiday record so you can compare the payment with the amounts due.

Frances N.U