Holiday pay for irregular hours workers: the 12.07% rule

Irregular hours and part-year workers build up statutory holiday at 12.07% of the hours they actually work in each pay period. Employers can also choose to pay holiday as it is earned, adding 12.07% of pay to each payslip. These rules apply to leave years starting on or after 1 April 2024.

Who counts as an irregular hours or part-year worker?

The rule applies to two groups defined in the Working Time Regulations 1998. GOV.UK’s reform guidance describes them like this:

• Irregular hours worker: the paid hours in each pay period are wholly or mostly variable under the contract, such as a zero-hours worker.
• Part-year worker: the worker is required to work only part of the year, with at least one week in the year that is unpaid and not worked, such as term-time staff.

Staff on fixed hours, full-time or part-time, are not covered. Their holiday works differently; see our guide to holiday entitlement.

Why is the figure 12.07%?

The figure is 5.6 weeks of statutory leave divided by the 46.4 weeks a worker is at work (52 weeks minus 5.6). As a percentage, 5.6 ÷ 46.4 = 12.07%. It gives someone who works every available week the same 5.6 weeks a regular worker gets.

How to work out accrued holiday

You calculate holiday at the end of each pay period, from the hours worked in it.

1. Take the hours worked in the pay period.
2. Multiply by 12.07%.
3. Round to the nearest hour: 0.5 of an hour or more rounds up.
4. Add the result to the worker’s balance. They can use it from the next pay period.

GOV.UK’s example: a weekly paid worker works 30 hours, so 30 × 12.07 ÷ 100 = 3.621, which rounds to 4 hours.

Accrual stops at the statutory cap of 5.6 weeks, or 28 days. During maternity, other family leave or sick leave, accrual is based on average hours over a 52-week period instead. Our holiday entitlement calculator helps with the sums.

What is rolled-up holiday pay?

Rolled-up holiday pay means paying holiday as an extra 12.07% on every payslip, instead of when the worker takes leave. It is optional and allowed only for irregular hours and part-year workers, for leave years from 1 April 2024.

The guidance says the rolled-up amount should be shown clearly as a separate item on the payslip. Employers should check whether the change varies the contract and tell workers before starting.

Example. A worker earns £400 in a week, including regular overtime. Rolled-up holiday pay is £400 × 12.07% = £48.28, so the payslip shows £400 of pay plus £48.28 of holiday pay. When the worker takes leave, they are not paid again for it.

Our holiday pay calculator works out both methods.

Which method applies to you?

• If the worker has fixed regular hours: do not use 12.07%. Use 5.6 weeks, pro rata for part-timers.
• If the worker’s hours vary and you want to pay when leave is taken: accrue at 12.07% and pay a week’s pay based on the 52-week average.
• If the worker’s hours vary and you want simpler payroll: you can use rolled-up pay at 12.07% of each period’s pay.
• If the leave year started on or before 31 March 2024: the old rules applied to that year; the new method applies from the next leave year.

What pay goes into holiday pay?

For the first 4 weeks of leave, holiday pay must reflect normal pay, which can include regular overtime and commission. The remaining 1.6 weeks can be at basic pay, though many employers pay all 5.6 weeks at the normal rate. When you use the 52-week reference period, ignore unpaid weeks and look back no more than 104 weeks.

Holiday records you must keep

Since 6 April 2026, employers must keep records adequate to show they have complied with holiday rules. Section 35 of the Employment Rights Act 2025 added regulation 16B to the Working Time Regulations 1998. Records must be kept for six years from the date they are made, and failing to keep them is an offence. Read more in our Employment Rights Act timeline.

What employers should do

• List which staff are irregular hours or part-year workers.
• Check your payroll software applies 12.07% and rounds correctly.
• If you use rolled-up pay, show it as a separate payslip line.
• Keep hours, accrual and holiday taken records for six years.

Frequently asked questions

Does the 12.07% rule apply to part-time workers?

Not if they work fixed regular hours. It applies only to workers whose hours are wholly or mostly variable, or who work part of the year.

Can I pay rolled-up holiday pay to all my staff?

No. It is allowed only for irregular hours and part-year workers, for leave years starting on or after 1 April 2024.

Is there a cap on holiday for irregular hours workers?

Yes. Statutory entitlement is capped at 5.6 weeks, or 28 days, a year, however many hours are worked.

How do I round 12.07% holiday?

Round to the nearest whole hour: a result of 0.5 of an hour or more rounds up.

Can irregular hours workers carry over holiday?

Normally up to 8 days with agreement. If they could not take leave because of sickness, they can carry over up to 28 days, to be used within 18 months.