Answers · UK 2025/26

What is rolled-up holiday pay, and is it legal in 2026?

Rolled-up holiday pay adds an extra percentage (commonly 12.07%) on top of a worker's normal pay for each hour or shift worked, rather than paying holiday pay only when leave is actually taken. Following legislative changes, it is now explicitly permitted for irregular hours and part-year workers, but should be itemised separately on payslips and does not replace the worker's right to actually take time off.

Last updated: 4 July 2026Last reviewed: 4 July 2026How we verify

Full answer

Rolled-up holiday pay is a method of paying statutory holiday entitlement by adding an uplift — typically 12.07%, reflecting 5.6 weeks of statutory annual leave as a proportion of the other 46.4 working weeks in a year — onto a worker's pay for every hour or shift actually worked, rather than paying the worker their normal rate during a separate period when leave is taken. For a number of years, rolled-up holiday pay was considered unlawful under UK case law (following the European Court of Justice's ruling in Robinson-Steele v RD Retail Services), on the basis that mixing holiday pay into ordinary wages could discourage workers from actually taking time off, undermining the health and safety purpose of statutory leave. However, following changes to the Working Time Regulations that took effect for holiday years starting on or after 1 April 2024, rolled-up holiday pay is now explicitly permitted, but only for irregular hours workers and part-year workers (broadly, those whose hours vary significantly or who do not work the full year, such as term-time-only staff or genuinely casual zero-hours workers) — it remains unlawful for workers with regular, fixed hours throughout the year, who must continue to receive holiday pay calculated and paid only when they actually take leave. Where rolled-up holiday pay is used for eligible irregular hours or part-year workers, it must be calculated at 12.07% of the worker's total pay for the period, itemised as a clearly identifiable separate amount on the payslip (rather than being invisibly absorbed into a single hourly rate), and does not remove the worker's underlying statutory right to actually take 5.6 weeks of leave during the year — employers must still allow and, in practice, encourage workers to take time off, since simply paying the uplift does not discharge the health and safety purpose behind minimum statutory leave. Workers who believe they are being paid rolled-up holiday pay unlawfully (because their hours are actually regular and fixed, not genuinely irregular) should raise this with their employer or seek advice from Acas, since misclassification can result in an underpayment of holiday entitlement. Use the Holiday Entitlement calculator to check your statutory minimum leave and equivalent rolled-up pay uplift.