Few topics in UK employment law cause as much confusion as holiday entitlement for part-time and irregular hours workers. If you employ anyone who doesn't work a standard Monday-to-Friday pattern, you've probably spent time wrestling with spreadsheets, second-guessing your calculations, and wondering whether you're getting it right.

The confusion got worse — and then arguably better — in January 2024, when the government introduced significant changes to how holiday accrual works for irregular hours and part-year workers. The 12.07% accrual method became the standard approach, rolled-up holiday pay became legal again for certain workers, and employers suddenly had new rules to follow.

This guide walks you through exactly how to calculate holiday entitlement for part-time, irregular hours, and part-year workers in 2026. Whether you employ zero-hours staff, seasonal workers, or regular part-timers, you'll find the calculation method that applies to your situation.

Holiday entitlement HR infographic

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

Before you can calculate holiday entitlement, you need to know which category your workers fall into. The rules that apply depend entirely on how their working pattern is structured.

An irregular hours worker is someone whose paid hours of work are wholly or mostly variable in each pay period. This doesn't mean their hours change slightly from week to week. It means their hours are genuinely unpredictable, with no fixed pattern that repeats consistently.

A part-year worker is someone who is required to work only during certain parts of the year, with at least one period of a week or more during which they're not required to work and are not paid. The key detail is the gap. If there's no gap of at least one week where they don't work and don't get paid, they're not a part-year worker under these rules.

Common examples of irregular hours workers include zero-hours contract staff, casual workers called in as needed, and agency workers with varying assignments. Part-year workers typically include seasonal employees such as those in hospitality or agriculture, term-time only school staff, and workers on fixed-term contracts that don't cover the full year.

If your workers have fixed, predictable hours — even if those hours are part-time — they're regular part-time workers and follow a different calculation method. We'll cover that further down.

The 12.07% accrual method explained

For leave years starting from 1 April 2024 onwards, irregular hours and part-year workers accrue holiday using the 12.07% method. This applies right now in 2026 and is the legally correct approach for these worker types.

The percentage itself comes from a simple formula. Every full-time worker in the UK is entitled to 5.6 weeks of statutory annual leave. There are 52 weeks in a year. Subtract the 5.6 weeks of holiday and you get 46.4 working weeks. Divide 5.6 by 46.4 and multiply by 100, and you get 12.07%.

In practice, you calculate holiday accrual at the end of each pay period by taking the total hours worked and multiplying by 12.07%. The result is the number of hours of holiday the worker has accrued in that period.

A worked example

Suppose an irregular hours worker puts in 30 hours during a weekly pay period. You multiply 30 by 12.07%, which gives you 3.621 hours of holiday accrued. When the result includes a fraction of 0.5 or above, you round up. So 3.621 hours rounds to 4 hours of holiday accrued for that week.

If the same worker does 15 hours the following week, they accrue 15 × 12.07% = 1.8105 hours, which rounds up to 2 hours. In a week where they work zero hours, they accrue zero holiday. The calculation tracks actual hours worked, so it naturally adjusts to variable patterns.

This method replaces the older approaches that many employers were using before 2024. If you're still using a different formula — such as calculating a pro-rata proportion of 28 days based on average hours — you need to update your process. The 12.07% method is now the legally required approach for these worker categories.

What about rolled-up holiday pay?

One of the most significant changes from April 2024 was the re-introduction of rolled-up holiday pay for irregular hours and part-year workers. Previously, rolling holiday pay into a worker's normal pay was technically unlawful, even though many employers did it anyway. It's now explicitly permitted.

Rolled-up holiday pay means you add an additional 12.07% on top of the worker's total gross pay in each pay period, instead of paying them separately when they take holiday. The worker receives their holiday pay as they earn it, rather than when they take time off.

How it works in practice

If a worker earns £500 gross in a pay period, you add 12.07% of that amount — which is £60.35 — to their pay. Their total pay for the period becomes £560.35. This holiday pay element must be clearly itemised as a separate line on the payslip. You can't just lump it in with their normal pay without identifying it.

It's important to understand that rolled-up holiday pay is an option, not a requirement. You can choose to use it or stick with the traditional method of paying holiday when workers take it. Many employers find rolled-up pay simpler to administer for zero-hours and casual staff, which is why the government legalised it.

Premium HR payroll hero illustration

There's one crucial point that catches employers out. Even when you're paying rolled-up holiday pay, the worker must still actually take their leave. Paying the money doesn't remove the obligation to provide time off. You still need to ensure workers are taking their statutory entitlement, and you still need to track it.

Standard entitlement for regular part-time workers

If your part-time workers have a fixed, predictable pattern — say they work the same three days every week — they don't use the 12.07% method. Instead, their entitlement is calculated on a simple pro-rata basis of the full-time 5.6 weeks.

The calculation is straightforward. A full-time worker doing 5 days per week gets 28 days of statutory holiday (5.6 × 5). A worker doing 3 days per week gets 3 × 5.6 = 16.8 days per year. You don't round this to 17 automatically — the entitlement stays at 16.8 days unless your company policy says otherwise.

For workers on different weekly patterns, just swap in their number of working days. Someone working 2 days per week gets 11.2 days. Someone working 4 days per week gets 22.4 days. The formula always works the same way.

What about bank holidays?

Whether bank holidays are included in the statutory 28 days depends entirely on the employment contract. There's no legal requirement to give bank holidays off as paid leave. An employer can include them within the 28-day entitlement, add them on top, or require staff to work on bank holidays and take their leave on other days.

For part-time workers, this is a common source of disputes. If full-time staff get bank holidays on top of their basic leave, part-timers must receive an equivalent pro-rata benefit. Otherwise, you risk a claim for less favourable treatment under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.

Calculating entitlement in hours instead of days

Some employers find it easier to express part-time entitlement in hours rather than days, particularly when workers don't work the same number of hours each day. To do this, multiply the full-time weekly hours by 5.6. If full-time is 37.5 hours per week, the annual entitlement is 210 hours. A part-timer working 22.5 hours per week gets 22.5 × 5.6 = 126 hours.

Using hours avoids the awkward situation where a part-timer books a "day" of holiday but actually works longer or shorter days depending on the day of the week. It's a cleaner approach and reduces the chance of employees feeling short-changed when they use a holiday day on a longer shift.

Record-keeping requirements you can't ignore

From April 2026, the Fair Work Agency has the power to inspect your holiday records, and the consequences for poor record-keeping are serious. Employers must retain holiday pay and annual leave records for a minimum of six years. This applies to all workers, but it's especially important for irregular hours and part-year staff where calculations are more complex.

Your records must demonstrate how much statutory leave each worker has taken, how holiday pay was calculated, the hours worked in each pay period, and any variable pay elements like overtime, commission, or bonuses that affect holiday pay calculations. These records must be kept even after the worker has left your business.

The Fair Work Agency can inspect premises, interview workers, require you to produce records, and seize documents. Penalties for non-compliance include penalty notices and criminal sanctions with unlimited fines. This isn't a minor administrative requirement. It's a criminal offence to fail to maintain proper records, which puts it in the same category as National Minimum Wage record-keeping obligations.

Common mistakes employers make

Holiday calculations for non-standard workers are a minefield, and even well-intentioned employers get tripped up. Here are the mistakes that come up most frequently.

Using the old pre-2024 calculation method. If you haven't updated your holiday calculations since April 2024, you're likely using the wrong formula for irregular hours and part-year workers. The 12.07% accrual method is now the legal standard, and using anything else puts you at risk of underpayment claims.
Not itemising rolled-up holiday pay on payslips. If you're using rolled-up holiday pay, it must appear as a separate line item on the payslip. Bundling it into the gross pay figure without identifying it doesn't meet the legal requirement and could mean you can't prove you've paid it at all.
Forgetting bank holidays for part-timers. Part-time workers are entitled to a pro-rata equivalent of whatever bank holiday benefit full-time staff receive. Ignoring this creates a discrimination risk that's easy to avoid with proper planning.
Not updating contracts after the rule change. If your employment contracts still reference old holiday calculation methods, they need updating. Outdated contracts create confusion for both employers and employees and can weaken your position if there's ever a dispute.
Rounding down instead of up. When holiday accrual calculations produce a fraction of 0.5 or above, you should round up, not down. Rounding down consistently across multiple pay periods can add up to a meaningful underpayment over the course of a year.
Treating all part-time workers the same. A regular part-timer working set days every week uses the pro-rata method. An irregular hours worker uses the 12.07% accrual method. Applying the wrong method to the wrong worker type is one of the most common errors employers make.

How software prevents calculation errors

Manual holiday calculations for irregular hours workers are tedious and error-prone. When you're juggling multiple workers with different patterns, each accruing holiday at different rates, spreadsheets quickly become unmanageable. This is where dedicated HR software earns its keep.

Sage HR calculates holiday accrual automatically based on each worker's actual working pattern. Whether someone is part-time with fixed hours, on a zero-hours contract, or working irregular shifts, the system applies the correct calculation method without you having to think about which formula to use.

The platform also handles rolled-up holiday pay calculations, tracks accrued entitlement in real time, and maintains the kind of audit trail that the Fair Work Agency will expect to see if they come knocking. With the new six-year record-keeping requirements now in effect, having a system that stores everything automatically isn't just convenient — it's practically essential.

Beyond calculation accuracy, good software helps you spot patterns. You can see at a glance which workers haven't taken enough holiday, who has carry-over building up, and where you might have compliance gaps. Trying to do this manually across a workforce of irregular hours staff is a recipe for mistakes.

Holiday entitlement for irregular hours and part-year workers follows the 12.07% accrual method for leave years starting from April 2024 onwards. Getting this right isn't optional — the Fair Work Agency has the power to inspect your records, issue penalties, and pursue criminal sanctions for non-compliance.

Frequently asked questions

Do zero-hours workers get paid holiday?

Yes. Zero-hours workers are legally entitled to paid annual leave. Their holiday accrues using the 12.07% method based on actual hours worked. If they work no hours in a pay period, they accrue no holiday for that period, but any previously accrued entitlement remains available to use.

Can I use rolled-up holiday pay for all employees?

No. Rolled-up holiday pay is only permitted for irregular hours and part-year workers. You cannot use it for regular full-time or part-time employees with fixed working patterns. For those workers, holiday pay must be paid when they actually take their leave.

What happens if I've been calculating holiday wrong?

If you've been underpaying holiday entitlement, affected workers may be able to claim back what they're owed. The Fair Work Agency can look back up to six years for underpayment issues. It's worth getting your calculations right now and, if necessary, seeking legal advice about any historical shortfall.

Does the 12.07% method apply to all leave years?

The 12.07% method applies to leave years starting on or after 1 April 2024. If your company's leave year runs from January to December, the method would have applied from 1 January 2025. Check your leave year start date to confirm when the change took effect for your business.

How do I handle holiday carry-over for irregular hours workers?

Irregular hours and part-year workers can carry over up to the equivalent of 5.6 weeks of accrued but unused holiday in specified circumstances, such as sickness or family leave. Any carried-over leave must be used within 18 months. Your records need to track both accrued and carried-over entitlement separately.

This article is for informational purposes only and does not constitute legal or HR advice. Employment law is subject to change, and the rules described here reflect the position at the time of writing. For advice specific to your situation, consult a qualified employment lawyer or HR professional.