lumi guides · UK reward and HR

How to calculate holiday pay for irregular hours

UK law as at 20 September 2026Review by 6 April 2027By David Whitfield

In short

  • For leave years starting on or after 1 April 2024, irregular-hours and part-year workers accrue holiday at 12.07% of hours worked in each pay period, up to 28 days a year.
  • Pay leave when taken at the average of the last 52 paid weeks, or add 12.07% to each payslip as rolled-up holiday pay. Both include commission and regular overtime.
  • In the lumi reward benchmark, 53.0% of organisations accrue holiday and pay it when taken, and 36.5% roll it up (n = 219).
  • Since 6 April 2026, holiday and holiday pay records must be kept for 6 years.
  • By the end you will have classified workers, chosen a pay method and calculated accrual and pay.

Before you start

Legal basis. The Working Time Regulations 1998: regulations 15B to 15F (irregular-hours and part-year workers), 16 (holiday pay), 16A (rolled-up holiday pay) and 16B (records, inserted by the Employment Rights Act 2025 from 6 April 2026) [2][3]. They extend to England, Wales and Scotland.

Who to involve. Payroll, HR and whoever owns contracts, which a change of pay method may affect [4][5].

What you need. Contracts; hours and pay for each pay period over up to 104 weeks, split into basic pay, overtime, commission and other payments; sick and statutory leave dates; leave balances.

Step 1: Identify irregular-hours and part-year workers

Test each worker for each leave year [2]:

  • Irregular-hours: under the contract, paid hours in each pay period are wholly or mostly variable. Acas gives zero-hours, casual and bank contracts as examples [5]. In a GOV.UK example, a fixed two-week rotating pattern does not qualify [4].
  • Part-year: the contract requires work for only part of the year, with periods of at least a week that the worker isn't required to work and isn't paid for. Ignore sick and statutory leave in this test [2].

Look at multiple contracts with the same employer together [2]. Agency workers can be in either group [5].

The rules apply to leave years beginning on or after 1 April 2024 [2], so every current leave year is covered. Unless a relevant agreement sets another date, the leave year starts on the employment start date and each anniversary [2].

Step 2: Accrue leave at 12.07% of hours worked

On the last day of each pay period, the worker accrues 12.07% of the hours worked in it [2]. A fraction under 30 minutes rounds to zero; 30 minutes or more rounds up to an hour [2][5]. Accrual stops at 28 days a year [2].

During sick or statutory leave, workers accrue 12.07% of their average weekly hours over the previous 52 weeks, leaving out weeks with sick or statutory leave [2].

◆ Decision: accrual rate.

For a contractual entitlement above 5.6 weeks, GOV.UK's formula is entitlement ÷ remaining working weeks × 100: 6 weeks gives 13.04% [4].

  • 12.07%: the legal minimum, but less than colleagues on enhanced leave.
  • A higher contractual rate: parity with those colleagues, at higher cost.

Step 3: Choose how to pay holiday

◆ Decision: accrue and pay when taken, or roll up

  • Pay when leave is taken: workers are paid while off, but each absence needs a 52-week average (Step 4). In the lumi reward benchmark, 53.0% of organisations use this method for these workers, the common answer (n = 219) (full findings) [1].
  • Rolled-up: 12.07% on each payslip and no calculation at the time of leave (Step 5), but no pay while off, so workers must budget. The alternative: 36.5% (n = 219) [1].
  • Another method: 10.5%, rare (n = 219) [1].

Rolled-up pay is allowed only for irregular-hours and part-year workers [3][6]. Before introducing it, check whether it varies the contract, and tell workers [4][5].

Step 4: Work out a week's pay over 52 paid weeks

Pay a week's pay for each week of leave taken [3]:

  1. Take the first day of leave as the calculation date. Count back 52 complete weeks, running Sunday to Saturday unless the worker is paid weekly on another cycle [3][4].
  2. Leave out weeks with no pay and weeks with sick or statutory leave. Replace them with earlier paid weeks, going back no more than 104 weeks. Anyone employed less than 52 weeks uses the complete weeks available [3][4][5].
  3. Week's pay = total pay in the counted weeks ÷ number of weeks.
  4. Leave is held in hours, so hourly holiday rate = week's pay ÷ average weekly hours in the same weeks [3].

What to include. These workers are paid all 5.6 weeks at the "normal" rate [3][6]. That includes commission and other payments linked to contractual tasks; payments for service, seniority or qualifications; and overtime regularly paid in the last 52 weeks [3]. Whether a bonus counts depends on its nature [4]. For regular-hours workers, these payments are needed for at least 4 weeks, and the other 1.6 weeks can be at basic pay [6][8].

◆ Decision: other payments, such as allowances.

In the lumi reward benchmark, 68.1% of organisations include some allowances in holiday pay where relevant, the common answer; 17.1% include none and 14.8% all, both rare (n = 257) [1].

  • Include: simpler, less risk of underpayment, higher cost.
  • Exclude: lower cost; record why each payment is outside the rule.

Worked example 1: pay when taken (computed in Python). A weekly-paid, variable-hours retail worker. Illustrative rates: £13.20 an hour, £19.80 overtime, plus commission.

  • Accrual: 27.5 hours × 12.07% = 3.3192 (19 minutes over 3), so 3 hours. 31 hours gives 3.7417 (44.5 minutes over), so 4 hours.
  • 16 hours' leave from Monday 5 October 2026. The 52 weeks run from Sunday 5 October 2025 to Saturday 3 October 2026.
  • Five unpaid weeks and two with sick leave are replaced by seven earlier paid weeks, back to 10 August 2025, skipping one unpaid week. All are within 104 weeks.
  • Counted weeks: 1,183 basic hours (£15,615.60), 81 overtime hours (£1,603.80), £1,092.00 commission. Total £18,311.40 for 1,264 hours.
  • Week's pay: £18,311.40 ÷ 52 = £352.14. Average hours: 24.3077. Hourly rate: £14.4869.
  • Result: 16 × £14.4869 = £231.79. Basic rate only would give £211.20, £20.59 short.

Step 5: Or roll up holiday pay at 12.07%

Calculate 12.07% of all pay that counts towards a week's pay, including commission and regular overtime [3]. Pay it with the pay for the work, as a separate payslip item [3][5]. Nothing is due when leave is taken, or on leaving [2][5]. Keep recording accrued hours so the worker can take the time off.

During sick or statutory leave, pay the average holiday pay per pay period from the previous 52 weeks, or since rolled-up pay began if shorter [3].

Worked example 2: rolled-up (computed in Python). A part-year visitor attraction worker on a year-round contract, working March to October, unpaid November to February, paid monthly. Illustrative July 2026 pay: 142 hours at £13.20 (£1,874.40), 12 overtime hours at £19.80 (£237.60), £85.00 commission. Total £2,197.00.

  • Holiday pay: 12.07% × £2,197.00 = £265.1779, so £265.18 as a separate payslip line.
  • Accrual: 12.07% × 154 hours = 18.5878 (35 minutes over 18), so 19 hours.
  • 12.07% of basic pay only would give £226.24, £38.94 short.

Step 6: Apply carry-over and leaving rules

Leave must normally be taken in the year it accrues. The exceptions [2][7]:

  • Agreement: a relevant agreement can let part of it carry into the next year.
  • Statutory leave: leave missed because of maternity or other statutory leave carries into the next year.
  • Sickness: leave missed through sickness carries forward, to be taken within 18 months of the end of the leave year it accrued in.
  • Employer failure: if you didn't recognise the right, give a reasonable opportunity to take leave and encourage it, or warn it would be lost, it carries forward until the end of the first full leave year without that failure.

Rolled-up leave carried over has already been paid [4].

◆ Decision: carry-over by agreement.

In the lumi reward benchmark, 76.9% of organisations allow carry-over (47.4% + 29.5%): 47.4% in specific circumstances, the common answer, and 29.5% as standard. 23.1% forfeit unused leave (n = 251) [1]. This covers employees generally.

  • None beyond the legal exceptions: a clean year-end, but you must prompt workers to use leave.
  • Limited, such as a set number of hours: flexibility for seasonal work, with a cap.
  • Standard: simplest for workers; balances and liabilities build up.

On leaving, pay for accrued leave not taken, at the Step 4 rate or a sum set in a relevant agreement; none is due for rolled-up leave. A relevant agreement can require workers to compensate you for leave taken beyond what they accrued [2].

Step 7: Keep records for six years

Since 6 April 2026, you must keep records adequate to show you have met the leave and holiday pay rules, including accrual, for 6 years from when they were made [3][8]. Acas lists holiday taken and carried over, holiday pay and what it includes, and payments in lieu [8]. For these workers, add hours and accrual for each pay period, and the weeks counted in each 52-week average. Acas notes that being unable to show holiday records could be a criminal offence [8].

In the lumi reward benchmark, 74.0% of organisations say they keep records that meet the Working Time Regulations, including accrual records for these workers, the common answer; 26.0% do not (n = 265) [1].

Checklist

  • Workers classified for the current leave year
  • Accrual at 12.07% (or a contractual rate), rounded each pay period
  • Accrual continued during sick and statutory leave
  • Pay method chosen, contracts checked and workers told
  • 52-week average excludes unpaid, sick and statutory leave weeks, within 104 weeks
  • Commission, regular overtime and status payments included for all 5.6 weeks
  • Rolled-up pay shown separately on each payslip
  • Carry-over applied for sickness, statutory leave and employer failure
  • Untaken leave paid on leaving, unless rolled up
  • Records kept for 6 years

FAQ

What is 12.07% based on? 5.6 weeks' leave divided by 46.4 working weeks (52 minus 5.6) [4].

Can I roll up holiday pay for a regular part-time employee? No. Only irregular-hours and part-year workers [6].

Do irregular-hours workers accrue holiday while off sick or on maternity leave? Yes, at 12.07% of their average weekly hours over the previous 52 weeks [2].

Is a term-time worker a part-year worker? It depends on the contract: are there periods of at least a week they aren't required to work and aren't paid for [2]?

Sources

  1. lumi reward benchmark, collection window 2026 H1, national figures: full findings
  2. legislation.gov.uk, The Working Time Regulations 1998, regulations 2 and 15B to 15F. https://www.legislation.gov.uk/uksi/1998/1833/regulation/15B
  3. legislation.gov.uk, The Working Time Regulations 1998, regulations 16, 16A and 16B. https://www.legislation.gov.uk/uksi/1998/1833/regulation/16
  4. Department for Business and Trade, Holiday pay and entitlement reforms from 1 January 2024 (GOV.UK, updated 1 April 2024). https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024
  5. Acas, Irregular hours and part-year workers: building up holiday, holiday pay, rolled-up holiday pay (22 April 2026). https://www.acas.org.uk/irregular-hours-and-part-year-workers
  6. GOV.UK, Holiday entitlement: holiday pay (accessed 20 September 2026). https://www.gov.uk/holiday-entitlement-rights/holiday-pay
  7. Acas, Carrying over holiday: irregular hours and part-year workers (22 April 2026). https://www.acas.org.uk/irregular-hours-and-part-year-workers/carrying-over-holiday
  8. Acas, Holiday entitlement: calculating holiday pay; keeping records (3 June 2026). https://www.acas.org.uk/checking-holiday-entitlement/keeping-records

This guide is general information about UK employment law and practice as at the date shown. It is not legal advice. Take advice on your own circumstances.

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Cite this guide
David Whitfield, How to calculate holiday pay for irregular hours. lumi, UK law as at 20 September 2026. https://lumihr.co.uk/guides/how-to-calculate-holiday-pay-irregular-hours
Last reviewed 20 September 2026 · This guide states the law at the date shown, with its sources listed. It is general information, not legal advice.