From January 2024, holiday pay for irregular hours and part-year workers in the UK changed significantly. This guide explains the new 12.07% accrual method, rolled-up holiday pay, and what workers are now entitled to.
Holiday pay for workers with irregular or variable hours has historically been one of the most litigated areas of employment law. The rules changed significantly in January 2024, following the Supreme Court's decision in Harpur Trust v Brazel [2022] and the government's subsequent reforms.
The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 came into force on 1 January 2024 and fundamentally changed how holiday entitlement is calculated for irregular hours workers and part-year workers.
The key change: a new method for calculating holiday entitlement — the 12.07% accrual method — was restored for these workers, overturning the effect of Harpur Trust v Brazel.
The new rules apply to:
Workers whose working hours are wholly or mostly variable from week to week under the terms of their contract. This includes many zero-hours workers, agency workers on variable assignments, and casual workers.
Workers who are contracted for the whole year but only work for part of it — for example, term-time-only school workers.
Full-time and part-time workers with fixed hours are not affected — the standard 5.6 weeks (28 days) entitlement and calculation methods continue to apply.
For irregular hours and part-year workers, holiday entitlement is now calculated as 12.07% of hours worked in the relevant pay period.
Where does 12.07% come from?
Example:
This accrual happens in real time as you work, rather than at the start of the leave year.
From 1 January 2024, rolled-up holiday pay is again permitted for irregular hours and part-year workers (it had been prohibited by EU case law but that prohibition no longer applies post-Brexit to UK domestic law).
Rolled-up holiday pay means your holiday pay is added to each payslip as an additional percentage of your pay — currently 12.07% — rather than being paid when you actually take leave.
Requirements for rolled-up holiday pay:
Your employer can choose either:
Holiday pay must reflect your normal remuneration — not just basic hourly rate. This includes:
The calculation uses your average pay over the previous 52 working weeks (ignoring any weeks with no pay).
Employers must keep records of:
Workers have the right to see these records.
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