Zero hours holiday pay

Why this matters right now

April 2024 Working Time Regulations amendment reintroduced rolled-up holiday pay for irregular-hours and part-year workers - reversing the 2006 Robinson-Steele ban. This is the most significant change to UK holiday pay in a decade. Zero hours workers now have two lawful methods, and employers must choose one and disclose it clearly on the payslip.

The 5.6-week statutory entitlement

Every UK worker, including zero hours, is entitled to 5.6 weeks of paid holiday per year. For irregular-hours workers this is expressed as a percentage of hours worked:

• Calculation: 5.6 weeks / 46.4 working weeks = 12.07 per cent of hours worked.
• Example: worker on zero hours does 500 hours in a year → accrued holiday = 500 × 12.07% = 60.35 hours.
• Paid at the ordinary rate of pay (basic plus regular commission or overtime per British Gas v Lock).

The two lawful methods (post-April 2024)

Employer chooses one method. Cannot mix within the same contract. Change to method requires notice and contractual variation.

Case example: underpaid rolled-up holiday

A hospitality zero hours worker was paid £12/hour with no holiday pay identified on the payslip. Total 800 hours worked over 12 months = £9,600. Correct rolled-up holiday: 12.07% × £9,600 = £1,159 owed but never paid. Worker raised in writing, then via ACAS Early Conciliation, then tribunal. Award: £1,159 back-pay plus interest. The lesson: rolled-up holiday pay is lawful only if it appears as a distinct line on the payslip labelled as holiday pay - not just "£12 including holiday".

Rolled-up holiday - payslip requirement

For rolled-up to be lawful, the payslip must show:

• Basic hourly pay line.
• Holiday pay line separate, labelled as holiday pay.
• Total gross pay.

A single "£12 including holiday" line does not meet the requirement. Employers who bury holiday pay in a headline rate are at risk of unlawful-deductions claims for the full 12.07%.

Standard accrual - practical mechanics

Where the employer uses standard accrual:

1. Hours worked accumulate into a holiday balance.
2. Worker requests leave using the balance.
3. Employer approves subject to normal operational needs.
4. Leave is paid at ordinary rate (basic plus regular commission/overtime).
5. Untaken balance is paid out on termination.

Accrual can produce practical problems for very-irregular workers (small monthly balance builds slowly, hard to plan around). Rolled-up is often better for this cohort.

Ordinary rate of pay for holiday

Since British Gas Trading v Lock [2016] and Bear Scotland v Fulton [2015], ordinary rate for holiday pay must include:

• Basic pay.
• Regular commission earned during work performance.
• Regular overtime (both compulsory and voluntary if regular).
• Regular bonuses tied to work performance.
• Allowances tied to work performance.

Reference period for calculating "regular": 52 weeks preceding the holiday, ignoring weeks with no pay.

Holiday on termination

Zero hours workers ending an assignment or employment are entitled to:

• Standard accrual: unused balance paid at ordinary rate as lump sum.
• Rolled-up: no separate lump sum (holiday was paid as accrued).

Payment must appear as a separate line on the final payslip and be paid in the next payroll run.

Enforcement

Underpaid holiday pay claims:

1. Raise in writing with the employer within 3 months of the payment.
2. Notify ACAS Early Conciliation.
3. Tribunal claim for unlawful deductions from wages (section 13 ERA 1996) or breach of Working Time Regulations.
4. Recovery can go back up to 2 years under the Deductions from Wages (Limitation) Regulations 2014.

HMRC also enforces minimum-wage compliance; where holiday pay non-compliance takes hourly rate below NMW, HMRC intervention is possible.

Useful calculators

• Holiday entitlement calculator
• Notice period calculator
• Final pay estimator
• Final working day calculator
• PILON calculator

Related guides

• Zero hours contract rights
• Agency worker rights
• Holiday accrual during notice
• What happens to unused holiday pay
• Employment rights checker

Authority pages

• Employment rights hub
• Notice period rights UK
• Redundancy rights UK
• Employment tribunal UK

Frequently asked questions

Do zero hours workers get holiday pay?

Yes. Every UK worker, including zero hours, is entitled to 5.6 weeks paid holiday per year pro-rated to hours worked. For zero hours this is 12.07 per cent of hours worked, paid either as rolled-up (added to each pay period) or standard accrual (balance paid when leave is taken).

What is 12.07 per cent holiday pay?

The percentage uplift representing 5.6 weeks holiday per 46.4 working weeks (5.6/46.4 = 12.07%). Rolled-up holiday pay adds this percentage to each pay period. Since April 2024, this is lawful again for irregular-hours and part-year workers.

Can rolled-up holiday pay be included in the hourly rate?

No. For rolled-up to be lawful the payslip must show holiday pay as a distinct line labelled as such - separate from basic pay. A single '£12 including holiday' line does not meet the requirement and can trigger unlawful-deductions claims.

Do zero hours workers get holiday pay at their commission rate?

Yes. Since British Gas v Lock, ordinary rate for holiday must include regular commission, regular overtime, regular bonuses and allowances tied to work performance. Reference period: 52 weeks preceding the holiday, ignoring weeks with no pay.

How long do I have to claim underpaid holiday?

3 months to notify ACAS Early Conciliation. Tribunal claim thereafter for unlawful deductions from wages (section 13 ERA 1996). Recovery can go back up to 2 years under the Deductions from Wages (Limitation) Regulations 2014.

General information about UK employment law, not legal advice. For your situation, contact ACAS or an employment-law solicitor.