To calculate holiday pay for hourly and irregular-hours workers in the UK, you accrue holiday at 12.07% of the hours they work each pay period, then pay it either when leave is taken (at their average earnings over the last 52 paid weeks) or as rolled-up holiday pay added to every payslip. Fixed-hours and salaried staff are simpler: a week's holiday is paid at a normal week's pay.
The hard part is not the percentage. It's knowing exactly how many hours each person worked, keeping the accrual accurate as their hours change, and classifying each worker correctly so you use the right method. This guide covers all three, with worked examples using the current rules.
How much paid holiday are UK workers entitled to?
Almost every UK worker is entitled to 5.6 weeks of paid holiday a year. For someone working five days a week, that's 28 days, which is the statutory cap. Part-time and irregular workers get the same 5.6 weeks, pro-rated to the hours or days they actually work.
Bank holidays are not a separate right. Your contract decides whether the eight UK bank holidays sit inside the 5.6 weeks (so a full-time worker's 28 days includes them) or are given on top (28 + 8 = 36 days). Either is allowed, the contract just has to be clear.
This all sits under the Working Time Regulations 1998, updated by reforms that took effect for leave years starting on or after 1 April 2024.
How do you calculate holiday pay for hourly and irregular-hours workers?
For irregular-hours and part-year workers, holiday builds up at 12.07% of the hours worked in each pay period. That figure comes from the statutory 5.6 weeks divided by the 46.4 working weeks left in the year (5.6 ÷ 46.4 = 12.07%).
When the worker actually takes that holiday, you pay it at their average earnings over the previous 52 paid weeks (the 52-week reference period as shown below) unless you use rolled-up holiday pay instead.
What is rolled-up holiday pay, and can you use it?
Rolled-up holiday pay means paying the holiday element with every payslip instead of when leave is taken. It became lawful again for irregular-hours and part-year workers for leave years starting on or after 1 April 2024 (it had been unlawful since the 2006 Robinson-Steele ruling).
The rules are strict:
- Pay at least 12.07% of the worker's total pay for the period.
- Pay it at the same time as their wages.
- Show it as a separate, clearly labelled line on the payslip; it cannot be hidden inside a higher hourly rate.
ACAS example. Jian earns £1,000 in June. On top of that they receive £120.70 rolled-up holiday pay, itemised separately on the payslip.
Rolled-up pay is only for irregular and part-year workers, never for fixed-hours staff. For the full mechanics, eligibility tests and payslip requirements, see our guide to rolled-up holiday pay for irregular-hours staff.
How do you calculate holiday pay for fixed-hours and salaried staff?
For staff with fixed hours, a week's holiday is paid as a normal week's work. A salaried employee keeps their usual weekly salary while on leave; a fixed-shift hourly worker is paid their contracted hours at their normal rate.
It only gets complicated when pay varies, different hours or different earnings week to week. Then you use the 52-week reference period: average the pay from the previous 52 weeks in which they were paid, skipping any unpaid weeks and going back up to 104 weeks to find 52 paid ones. That average sets the value of a week's holiday.
One trap: a rotating shift pattern that is fixed by contract (say 15 hours one week, 20 the next, on repeat) counts as a regular worker, not an irregular-hours worker. Misclassifying fixed-pattern staff as irregular is one of the most common and costly errors.
Do you include overtime and commission in holiday pay?
Often, yes. Following a series of tribunal rulings (Bear Scotland, Lock, Agnew), holiday pay for the first 4 weeks of the 5.6-week entitlement must reflect normal remuneration, not just basic pay. That includes:
- Regular overtime (including voluntary overtime, if worked regularly enough to be normal)
- Commission
- Shift premiums and regular allowances
The remaining 1.6 weeks can be paid at basic pay, though many employers apply the higher rate to all 5.6 weeks to keep payroll simple. If your team regularly works overtime, get this right, underpaid holiday pay is a leading source of tribunal claims.
What do employers get wrong most often?
- Misclassification. Applying 12.07% or rolled-up pay to fixed-hours staff, or missing that a casual worker has drifted into a regular pattern and no longer qualifies.
- Hiding the uplift. Rolling holiday pay into the hourly rate without a separate payslip line. A tribunal can rule it was never paid, meaning you pay it again.
- Ignoring normal pay. Calculating holiday on basic pay when regular overtime or commission should be included.
- Poor records. From 6 April 2026, employers must keep records of annual leave and holiday pay, including any carried over. Manual spreadsheets make this hard to evidence.
How Shiftbase keeps holiday pay accurate
Every holiday pay calculation starts with accurate hours. Shiftbase time tracking captures the hours each worker actually does, and Shiftbase absence management tracks their holiday accrual against their contract automatically, so the 12.07% maths and the payslip figures are based on real data, not a spreadsheet that's always slightly behind.
Because it links accrual rules to each contract, Shiftbase flags irregular and part-year patterns and keeps statutory and above-statutory balances separate. Approved hours and leave export to payroll without re-entry, which is what keeps holiday pay clean and defensible. It runs alongside employee scheduling in one connected platform, built for shift-based teams across the industries we serve.
See how much admin it removes; try Shiftbase free for 14 days (no card required).
