Zero-hours contract holiday pay: how to calculate it

The payroll calculation starts with a classification decision. A worker described as “zero-hours” might qualify for the 12.07% rules, but the contract terms decide. Apply the wrong regime and an apparently tidy holiday calculation can still be an underpayment.

This guide covers Great Britain as at 11 August 2026. Northern Ireland has different rules, which we set out below.

The quick answer

Zero-hours workers get statutory paid holiday. In Great Britain, qualifying irregular-hours and part-year workers accrue holiday each pay period at 12.07% of the hours worked, for leave years beginning on or after 1 April 2024. Employers can either pay holiday when leave is taken, using a 52-week average, or use lawful rolled-up holiday pay, adding at least 12.07% to remuneration for work done and showing it separately on every payslip. The zero-hours label alone does not decide whether those rules apply.

First, check which rules apply

The Working Time Regulations 1998 provide four weeks of statutory leave under regulation 13 and another 1.6 weeks under regulation 13A. That gives the familiar 5.6-week minimum, subject to a 28-day cap.

There are now two calculation regimes in Great Britain:

Worker and leave-year position	Entitlement and pay regime
Irregular-hours or part-year worker under regulation 15F, for a leave year beginning on or after 1 April 2024	Regulation 15B accrual at 12.07% of hours worked. The employer may use regulation 16A rolled-up holiday pay or pay when leave is taken.
Worker outside regulation 15F, or an earlier leave year	The ordinary regulations 13 and 13A regime applies. Earlier leave years involving part-year workers were also governed by the Supreme Court’s decision in Harpur Trust v Brazel (20 July 2022), which rejected 12.07% pro-rating and required the full 5.6 weeks.

The reforming regulations were made on 19 December 2023 and came into force on 1 January 2024, but the new accrual and rolled-up pay rules apply only to leave years beginning on or after 1 April 2024. An employer using a January to December leave year did not enter the new regime until 1 January 2025.

Regulation 15F defines an irregular-hours worker by reference to the contract. The number of paid hours in each pay period must be “wholly or mostly variable”. A worker on a fixed rotating pattern does not qualify merely because the rota changes. The question is what paid hours the contract requires, not what someone called the arrangement when they created the payroll record.

A part-year worker is required under the contract to work only part of the year, with at least one unpaid period lasting a week or more. Annualised-pay workers fall outside this definition, because their non-working weeks are paid. Where someone has multiple contracts with the same employer, regulation 15F requires them to be assessed in the round, and sick leave and statutory leave are ignored when deciding whether someone is a part-year worker.

This is the first control payroll needs. Store the classification, the contractual basis for it and the applicable leave-year start date. Do not apply one global 12.07% setting to everybody described as casual.

How entitlement accrues: the 12.07% method

For a qualifying regulation 15B worker, statutory holiday accrues on the last day of each pay period:

Holiday hours accrued = hours worked in the pay period x 12.07%

The percentage is 5.6 weeks of leave divided by the 46.4 working weeks that remain in a 52-week year once the leave itself is taken out. GOV.UK’s guidance puts it the other way round: 12.07% of 46.4 is 5.6.

If the contract gives more than 5.6 weeks, Acas says the percentage must be increased. The statutory 12.07% rate does not fund an enhanced contractual entitlement by itself.

The result is calculated in hours, and regulation 15B then imposes a whole-hour rounding rule: a fraction below 30 minutes rounds down to zero, and a fraction of 30 minutes or more rounds up to one hour. Both directions are mandatory under the regulation.

The GOV.UK Jill example uses 68 hours worked in June:

68 ÷ 100 x 12.07 = 8.2076 hours

The fraction is under 30 minutes, so Jill accrues 8 hours.

Here is a separate Wagecrew illustration for the other side of the rounding rule. A worker completes 46 hours in one pay period:

46 x 12.07% = 5.5522 hours

The fraction is just over 33 minutes, so the balance rounds up to 6 hours.

That rounding applies to entitlement hours. It is separate from payroll’s ordinary treatment of money.

Regulation 15B also caps statutory accrual at 28 days in a leave year, and someone working six days a week does not receive 33.6 statutory days. There is an unresolved drafting wrinkle here: accrual is recorded in hours, the cap is expressed in days, and the legislation provides no conversion rule. Do not invent a fixed hours-equivalent for 28 days. Where a worker approaches the cap, record the approach taken and take advice on the facts.

Paying it, option one: rolled-up holiday pay

Rolled-up holiday pay became lawful again for a narrow group. Regulation 16A permits it only for workers whose leave falls under regulation 15B. It remains unlawful for regular-hours workers.

For a valid rolled-up arrangement, check every condition:

• The worker qualifies as irregular-hours or part-year under regulation 15F.
• The relevant leave year began on or after 1 April 2024.
• Holiday pay is at least 12.07% of remuneration for work done.
• The calculation includes every payment type that would form part of a regulation 16 week’s pay, including relevant premiums.
• The holiday pay is paid at the same time as the pay for the work.
• Every itemised payslip shows holiday pay as a separate amount.
• The worker is still enabled and encouraged to take leave.

The percentage applies to total remuneration for work done, not merely basic hours. GOV.UK’s Mark example makes that explicit. Mark works 20 hours at £11 and another 20 hours at £12:

(20 x £11) + (20 x £12) = £460 remuneration £460 x 12.07% = £55.52 rolled-up holiday pay

The higher-rate hours stay in the base. A payroll rule that applies 12.07% only to Mark’s £11 basic rate understates his holiday pay.

Rolled-up holiday pay must also sit on top of a rate that meets the minimum wage in its own right. The National Living Wage for workers aged 21 and over is £12.71 from April 2026, so a compliant rolled-up arrangement at that rate pays £12.71 for the hour plus £1.53 of holiday pay (12.07% of £12.71), £14.24 in total. Advertising or paying an “inclusive” £12.71 rate, with holiday pay supposedly contained inside it, leaves the underlying work rate below £12.71. GOV.UK says the holiday uplift is additional to normal pay, which must itself meet the minimum wage.

Payment does not replace time off. Acas says workers must still be enabled and encouraged to take their leave. The separate payslip line is evidence of payment, not evidence that the worker had a reasonable opportunity to rest.

Paying it, option two: pay when the leave is taken

An employer can keep holiday pay attached to the leave itself. For workers with variable pay, the calculation uses a 52-week reference period.

Use complete weeks in which the worker received pay. Skip weeks with no pay and look further back, up to a maximum of 104 weeks. If the worker has shorter service, use the available complete paid weeks. This 52-week mechanism has applied since 6 April 2020.

For regulation 15B workers, all statutory leave is paid at the normal rate. Do not import the regular-hours split under which four weeks attract normal remuneration and 1.6 weeks may be paid at basic pay.

Normal remuneration under regulation 16 includes payments linked to tasks under the contract, including commission, payments linked to professional or personal status, and overtime that was regularly paid during the preceding 52 weeks. The rule reflects the principles developed in the Williams, Lock and Bear Scotland cases, which were then written into regulation 16. Tronc payments sit in a grey area of their own: in the first-instance decision Palanki v The Big Table Group Ltd, tronc paid through the employer’s own bank account and payroll was found to count as normal remuneration on that scheme’s specific facts, which is a different question from whether the tronc keeps its National Insurance treatment. Our guide to how tronc schemes actually work sets out the allocation and tax rules in full.

For an irregular-hours worker, regulation 16(1A) converts the 52-week pay and hours history into an average hourly rate. Acas describes the result as the worker’s average hourly rate over the previous 52 weeks, paid for each hour of leave taken.

That average can differ materially from the worker’s current basic rate. Premium shifts, regular overtime and commission can raise it, and holiday pay already paid within the reference window is also included in the average for irregular-hours workers. Payroll needs both pay and hours history, not just the current rate from the worker record.

The old 12-week reference period is not the Great Britain rule. A system still using it has been out of date since April 2020.

Sickness, family leave and carry-over

Holiday entitlement continues to accrue during sickness and statutory leave. Regulation 15C calculates accrual for regulation 15B workers using average weekly hours from the 52 weeks before the absence. Weeks containing sickness or statutory leave are excluded and replaced with earlier weeks, subject to the 104-week backstop. The resulting weekly average is multiplied by 12.07% for each week of absence.

GOV.UK’s Harriet example uses 1,032 hours and a 46.4 divisor, producing 22.241 average weekly hours. Applying 12.07% gives 2.684 hours for each week of absence. Across 40 weeks, that is 107.36 hours, rounded to 107 hours. The 46.4 divisor is part of the guidance example and assumes full statutory leave was taken in the previous year; it is not wording found in regulation 15C.

Where rolled-up holiday pay was being used before sickness or maternity leave, do not calculate 12.07% of Statutory Sick Pay or Statutory Maternity Pay. Sick pay itself changed on 6 April 2026, and the reference period it uses is not the same as the holiday one, which we set out in our guide to statutory sick pay in 2026; maternity pay runs its own 8-week reference period again, anchored to the qualifying week rather than the absence date. Regulations 16A(4) to 16A(6) require an average of the rolled-up holiday pay paid over the previous 52 weeks for each absence pay period.

Carry-over depends on why leave was not taken. Untaken or unpaid leave can carry over where the employer failed to recognise the right, provide a reasonable opportunity to take leave or warn that it would otherwise be lost.

A regular-hours worker on long-term sickness can carry up to four weeks. A regulation 15B worker can carry the full 5.6 weeks under regulation 15D. The carried leave must be used within 18 months. Statutory family leave permits full carry-over.

Starters, leavers and final pay

Holiday accrues through the worker’s final pay period. On termination, the employer must pay for accrued statutory leave that has not been taken. Regulation 15E provides the tailored calculation for regulation 15B workers and their accrued untaken hours. For other workers, regulation 14 applies.

A relevant agreement can set the termination formula, but it cannot produce less than the statutory amount. Payment in lieu is otherwise prohibited while employment continues.

If someone has taken more leave than they accrued, the employer may deduct the excess from final pay only where that deduction was agreed in the contract or in writing beforehand. A payroll policy created after the leave was taken is not enough.

Agency workers

For agency workers, responsibility normally sits with the employment business that contracts with and pays the worker. Where an umbrella company employs and pays the worker, the umbrella pays the holiday pay.

The agency worker’s Key Information Document must state the holiday entitlement and explain how holiday pay will be handled, including any rolled-up arrangement. That requirement has applied under regulation 13A of the Conduct Regulations since 6 April 2020.

After 12 weeks in the same role, the Agency Workers Regulations require equal holiday and pay terms with comparable staff recruited directly by the hirer. That does not transfer the payroll obligation to the hirer.

The 12.07% method can apply to agency workers, but only where they meet the regulation 15F definition. Recruitment agencies need the same contract-level classification control as direct employers. The word “temporary” is not a calculation rule.

The records rule that is already in force

Since 6 April 2026, regulation 16B has required Great Britain employers to keep records adequate to demonstrate compliance with statutory holiday entitlement, holiday pay and termination payments. The records must be retained for six years from creation and can be kept in any reasonable format.

This is current law, not a proposal. A breach is a criminal offence under regulation 29 and can result in a fine.

For a shift employer, an adequate record should connect the worker’s contractual classification to hours worked, accrual calculations, rounding, pay components, leave taken, payslip lines, carry-over and final pay. A total posted to the payroll ledger without the underlying calculation may not show how compliance was reached.

The Fair Work Agency was established on 7 April 2026, but its live remit as described in its 19 May 2026 policy statement does not include holiday pay. The Department for Business and Trade consultation published on 30 June 2026 proposes Fair Work Agency enforcement from 2027, with penalties modelled on the minimum wage regime (the consultation proposes up to 200% of arrears, capped at £20,000 per worker, and a six-year recovery period). The consultation closes at 11:59pm on 22 September 2026. Those measures are proposals, not current law.

Guaranteed-hours offers, reasonable shift notice and short-notice payments are also not in force on 11 August 2026. The GOV.UK implementation timeline updated on 7 August 2026 places them in 2027.

Tribunal time limits are changing sooner. The present limit is three months from the payment or refusal date, with Acas early conciliation stopping the clock. The Employment Rights Act 2025 change to six months is scheduled for 1 October 2026, except in Scotland where the scheduled date is 9 November 2026. Until the relevant commencement date, the three-month limit remains the rule.

Common mistakes that create liability

The first mistake is applying 12.07% to every worker whose schedule changes. Regular-hours staff remain outside regulation 15B, and rolled-up holiday pay remains unlawful for them. Classification follows regulation 15F and the contract.

The second is using an obsolete 12-week reference period. Great Britain moved to 52 paid weeks on 6 April 2020, with unpaid weeks skipped and a 104-week lookback limit.

Other recurring errors are easier to spot:

• Calculating holiday pay from basic pay only while excluding regular overtime, commission or premiums that form normal remuneration.
• Paying rolled-up holiday pay without a separate line on every payslip.
• Paying an inclusive hourly rate that leaves the underlying work rate below the minimum wage.
• Treating payment as permission to prevent or discourage actual leave.
• Converting the 28-day cap into a fixed number of hours despite the absence of a statutory conversion rule.

Stale guidance makes these mistakes more likely. Even the GOV.UK page titled “Calculating holiday pay for workers without fixed hours or pay”, last updated on 23 July 2020, still says rolled-up holiday pay is unlawful and does not describe the 2024 regime. Check the page date and the worker group before copying a calculation.

Underpaid holiday can become an unlawful-deduction claim or a Working Time Regulations claim. In Agnew, decided by the Supreme Court on 4 October 2023, a three-month gap or an intervening correct payment did not necessarily break a series of deductions. The Employment Appeal Tribunal followed that reasoning in the agency-worker case Deksne v Ambitions Ltd on 15 October 2024. Great Britain still has a two-year backstop on unlawful-deduction recovery, so the broader series test and the two-year limit need to be read together.

How big this is for shift employers

The ONS EMP17 release published on 19 May 2026 estimated that 1,235,370 people had a zero-hours contract in their main job between January and March 2026. That was 3.59% of people in employment, up from 1,169,984 and 3.44% a year earlier. The ONS classifies these as official statistics in development, and the next release is due on 18 August 2026.

The concentration is not even across sectors:

Measure and source	Sector	Figure
Share of all zero-hours-contract workers, ONS EMP17 Table 6, released 19 May 2026	Accommodation and food services	344,696 people, 27.90%
Share of all zero-hours-contract workers, ONS EMP17 Table 6, released 19 May 2026	Health and social work	170,113 people, 13.77%
Share of all zero-hours-contract workers, ONS EMP17 Table 6, released 19 May 2026	Wholesale and retail	120,143 people, 9.73%
Rate within the sector, Work Foundation analysis of 2022 to 2023 Labour Force Survey microdata	Hospitality	18.8% of workers

The first three rows divide zero-hours workers by sector. The final row measures the proportion of hospitality workers on zero-hours contracts. They answer different questions and should never be combined.

There is also evidence of missed holiday pay, though it is survey-based rather than a count of proven breaches. The Resolution Foundation’s Labour Market Outlook published on 7 April 2026, using 2025 Annual Survey of Hours and Earnings data, estimated that 2.2 million jobs, 7.5% of the total, received no paid annual leave, and said the reported absence of paid holiday affected almost five times as many jobs as minimum wage underpayment. The TUC’s 2024 analysis of 2023 Labour Force Survey data estimated that about 1.1 million workers received no holiday pay, an estimated shortfall of about £2 billion, or about £1,800 per worker. The Department for Business and Trade cites both estimates in its 30 June 2026 consultation and warns about the limits of survey-based evidence. It also reports about 8,000 annual-leave tribunal claims in 2024/25.

That is why the payroll detail matters now for hospitality, care and agency workforces. The worker population is large, the calculation rules changed recently, and the six-year records duty is already live.

On pay more generally: zero-hours workers’ pay varies from week to week, and rolled-up holiday pay adds a separate payslip line their people will ask about, particularly when hours or premiums change. Employers running these workforces are exactly who we at Wagecrew serve. The employer case is on earned-wage access for employers, and how earned-wage access works explains the pay-timing mechanism; none of it changes holiday entitlement, and we would not claim otherwise.

Frequently asked questions

Do zero-hours workers get holiday pay?

Yes. The Working Time Regulations provide 5.6 weeks of statutory paid leave, capped at 28 days, although the calculation method depends on whether the worker meets the regulation 15F definitions. The contract terms decide whether the irregular-hours rules apply, not the zero-hours label alone.

Is rolled-up holiday pay legal now?

Yes, but only in Great Britain for regulation 15B irregular-hours and part-year workers whose relevant leave year began on or after 1 April 2024. Regulation 16A requires at least 12.07% of remuneration for work done, paid with the wages and itemised separately on the payslip. It remains unlawful for regular-hours workers.

How much holiday pay is due per hour under 12.07%?

For entitlement, regulation 15B gives 0.1207 hours of leave for each hour worked, before statutory whole-hour rounding at the end of the pay period. For rolled-up pay, regulation 16A applies 12.07% to remuneration for work done, so an hour paid at £12 produces £1.45 of holiday pay after ordinary payroll rounding.

Do zero-hours workers get bank holidays?

GOV.UK and Acas confirm there is no automatic right to take a bank holiday off, to receive premium pay for working one, or to receive bank holidays on top of the 5.6-week minimum. The contract decides, and bank holidays can be counted within statutory entitlement.

What happens to holiday pay when a worker leaves?

Regulations 14 and 15E require payment for accrued statutory leave that remains untaken on termination. Acas says an employer can deduct over-taken leave from final pay only where the deduction was agreed in the contract or in writing beforehand.

Can we use 12.07% for salaried staff?

Not simply because somebody is salaried or sometimes works variable hours. Regulation 15F requires the paid hours under the contract to be wholly or mostly variable, or the worker to meet the part-year definition. Regular-hours salaried staff remain under the ordinary regime and cannot lawfully receive rolled-up holiday pay.

Who pays an agency worker’s holiday pay?

GOV.UK says the employment business normally pays where it contracts with and pays the worker. If an umbrella company employs and pays the worker, the umbrella pays. The Key Information Document must identify the holiday arrangement, and the Agency Workers Regulations add equal-treatment rights after 12 weeks in the same role.

Do these rules apply in Northern Ireland?

No. The 2023 reforms extend to Great Britain, while Northern Ireland uses the Working Time Regulations (Northern Ireland) 2016. Labour Relations Agency guidance updated on 2 April 2026 retains a 12-week reference period, does not use the 12.07% accrual regime and treats rolled-up holiday pay as unlawful. No Northern Ireland equivalent of the regulation 16B records duty was identified in the verified research for this guide.

Further reading and sources

• Working Time Regulations 1998: the Great Britain rules on entitlement, accrual, holiday pay, carry-over, termination and records.
• Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023: the instrument that introduced regulations 15B, 15C, 15F and 16A.
• GOV.UK, Holiday pay and entitlement reforms from 1 January 2024: the official guidance and worked examples for accrual and rolled-up pay, including Jill, Mark and Harriet.
• GOV.UK, Holiday pay: current guidance on normal remuneration, reference periods and the records duty in force since 6 April 2026.
• Acas, Irregular hours and part-year workers: practical guidance on classification, accrual, rolled-up pay, sickness and carry-over.
• GOV.UK, Agency staff responsibilities: who is responsible for agency-worker holiday pay, and equal treatment after 12 weeks.
• Department for Business and Trade, Make Work Pay: holiday pay compliance and enforcement: the consultation closing on 22 September 2026, with the proposals for state enforcement from 2027.
• ONS EMP17, People in employment on zero-hours contracts: the May 2026 national and sector estimates.
• Working Time Regulations (Northern Ireland) 2016: the separate statutory regime for Northern Ireland.
• Deksne v Ambitions Ltd [2024] EAT 171: the agency-worker decision applying the series-of-deductions reasoning to holiday pay.