Holiday Pay Calculation UK 2026: Variable Hours, Zero-Hours and the 52-Week Reference Period
How holiday pay is calculated for workers with irregular hours in 2026/27. The 52-week reference period, 12.07% accrual method, worked examples at NLW £12.71/hr, and your statutory 5.6 weeks explained.
What the law says: your statutory minimum
Every worker in the UK — full-time, part-time, zero-hours, agency, casual — is entitled to 5.6 weeks' paid annual leave under the Working Time Regulations 1998. For someone working a standard five-day week, 5.6 weeks equals 28 days per year.
Your contract may give you more than 5.6 weeks (many employers offer 25–30 days), but it cannot give you less.
The bank holiday question
One of the most misunderstood points in employment law: you have no automatic legal right to paid bank holidays on top of your 5.6 weeks. The 5.6 weeks is the total — your employer can structure it as:
- 20 days' standard leave + 8 bank holidays = 28 days total (common practice), or
- 28 days all-inclusive, meaning bank holidays must be taken from your allowance.
Check your contract carefully. England and Wales have 8 public holidays per year; Scotland has 9; Northern Ireland has 10. If your employer's policy says "28 days including bank holidays," you have 20 days to book freely.
The 52-week reference period (Workers Act 2018 change)
Before April 2020, holiday pay for variable-hours workers was calculated using a 12-week average. This was changed following the Good Work Plan recommendations. From 6 April 2020, the reference period is 52 weeks.
How it works
When a worker with variable hours takes a week's holiday, their holiday pay is calculated as the average weekly pay over the 52 weeks immediately before the holiday begins.
Key rules:
- Only paid weeks count. If a week had zero pay (e.g. unpaid absence), skip it and look back further — up to a maximum of 104 weeks to find 52 paid weeks.
- "Weekly pay" includes: basic pay, regular overtime (compulsory and sufficiently regular voluntary overtime, per Bear Scotland 2014), regular commissions, and certain allowances.
- It does not include one-off bonuses, non-regular payments, or expenses.
Why the change matters
Under the old 12-week rule, a seasonal worker with a very busy patch immediately before their holiday would receive artificially high holiday pay. Conversely, someone taking leave right after a quiet period received less. The 52-week average irons out seasonal fluctuations and is fairer to both worker and employer.
Take-Home Pay Calculator
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Take-home pay calculatorWorked example 1: weekly-paid worker at fixed hours
Sophie works 37.5 hours/week as a warehouse operative, earning £600/week gross. She has a 5-day week and her employer gives her 28 days (5.6 weeks) including bank holidays.
Holiday entitlement:
- 5.6 × £600 = £3,360 total holiday pay per year
- Per week of holiday taken: £600
Her pay is fixed, so the 52-week average is simply her weekly rate. Simple.
After tax (for reference):
- Annual gross: £31,200
- Income tax: £3,726 (20% on £18,630 above PA)
- Employee NI: £1,490 (8% on £18,630)
- Net annual: £25,984 (~£2,165/month)
Use our take-home pay calculator to see your own net figure.
Worked example 2: hourly-paid worker at NLW rate
Marcus is 24 and works variable hours in hospitality, typically between 20 and 40 hours per week, always at the NLW rate of £12.71/hour from April 2026.
Step 1: Calculate his average weekly pay over 52 weeks
Suppose his total earnings over the 52 weeks before his holiday were £25,000.
Average weekly pay = £25,000 ÷ 52 = £480.77/week
Step 2: Holiday entitlement in weeks
Marcus is entitled to 5.6 weeks.
Total holiday pay = 5.6 × £480.77 = £2,692.31 per year
Alternative check using hourly rate
If Marcus works an average of 40 hours per week:
- 40 hours × £12.71 × 5.6 weeks = £2,847.44/year in holiday pay
This slightly higher figure reflects the NLW floor — in any week Marcus worked 40 hours, the minimum was £12.71 × 40 = £508.40.
Worked example 3: the 12.07% accrual method for irregular workers
The 12.07% method is commonly used for workers who have no set hours, such as casual workers paid by the shift.
Where 12.07% comes from:
- Statutory entitlement: 5.6 weeks out of 52 weeks total = 10.77% of total working time
- As a proportion of working time only (52 − 5.6 = 46.4 working weeks): 5.6 ÷ 46.4 = 12.07%
Application: Priya, a casual events worker
- January to March 2026: earned £4,200 total
- Holiday accrued: £4,200 × 12.07% = £507.34
Important caveat: HMRC and employment tribunals have moved away from the 12.07% method as the primary approach since the 52-week averaging rule came in. It remains useful as a quick estimate and for workers on very short engagements, but the 52-week average is the legally robust method where 52 weeks of data exist.
Zero-hours contracts and holiday pay
Zero-hours workers are entitled to exactly the same statutory holiday as any other worker — 5.6 weeks per year. Common myths:
| Myth | Reality |
|---|---|
| "Zero-hours workers don't get holiday pay" | They do — since the Working Time Regulations 1998 |
| "You can roll up holiday pay into an hourly rate" | This was made unlawful by Brazel v Harpur Trust [2022] — holiday pay must be paid when leave is taken |
| "If I work irregularly I accrue less than 5.6 weeks" | Entitlement is 5.6 weeks regardless of hours variation |
Key point from Harpur Trust v Brazel (Supreme Court, 2022): The Court confirmed that part-year workers (including zero-hours and term-time workers) should not have their 5.6 weeks pro-rated by the number of weeks actually worked. The 52-week average already adjusts pay downward for irregular workers — but the entitlement remains the full 5.6 weeks.
Part-time workers and proportional entitlement
While the weeks of entitlement (5.6) cannot be reduced, for fixed-hours part-timers the daily entitlement is calculated proportionally:
| Weekly working days | Statutory entitlement | Example: 25-day employer allowance |
|---|---|---|
| 5 days | 28 days | 25 + 8 bank holidays (if additional) |
| 4 days | 22.4 days (round up to 23) | 20 days |
| 3 days | 16.8 days (round up to 17) | 15 days |
| 2 days | 11.2 days (round up to 12) | 10 days |
Part-time workers must receive no less favourable treatment than comparable full-time workers on a pro-rata basis — Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.
Agency workers
Agency workers gain the same holiday entitlement as direct employees from day one of their assignment. However, it is the agency (not the end client) that is typically responsible for paying holiday pay. After 12 weeks in the same role, agency workers gain equal-pay rights under the Agency Workers Regulations 2010.
What regular overtime and commission must be included
Following the landmark Bear Scotland v Fulton case (2014) and subsequent cases, regular overtime must be included in holiday pay. This applies to:
- Compulsory overtime (contracted hours you must work if asked)
- Sufficiently regular voluntary overtime — if you've consistently worked it over the 52-week period, it's included
- Commission that forms part of normal remuneration
- Allowances that are intrinsically linked to the performance of tasks (e.g. shift premium for regular shift patterns)
What is not included:
- One-off or genuinely occasional overtime
- Purely discretionary bonuses
- Expenses
Failing to include regular overtime is one of the most common sources of holiday pay underpayment claims.
What to do if you think your holiday pay is wrong
- Ask for a written calculation — your employer must be able to explain how your holiday pay was calculated.
- Check your payslips — compare holiday weeks against normal pay weeks.
- Use the ACAS early conciliation service before going to tribunal — it's free and often resolves disputes.
- Time limits — claims for unlawful deduction of wages (which covers holiday pay) must be brought within 3 months less one day of the deduction, or the last in a series of deductions.
- Back-pay — if there's a continuing series of underpayments, you may be able to claim backdated amounts, though claims are effectively capped at 2 years by the Deduction from Wages (Limitation) Regulations 2014.
Holiday pay summary table
| Worker type | Reference period | Entitlement | Pay basis |
|---|---|---|---|
| Full-time fixed hours | Fixed weekly rate | 5.6 weeks (28 days) | Normal weekly pay |
| Variable hours | 52-week average | 5.6 weeks | Average of 52 paid weeks |
| Zero-hours | 52-week average | 5.6 weeks (not pro-rated) | Average of 52 paid weeks |
| Part-time fixed | Fixed weekly rate | 5.6 weeks × days/5 | Normal weekly pay |
| Agency worker | 52-week average or fixed | 5.6 weeks | As above |
| Casual/irregular | 52-week avg or 12.07% | 5.6 weeks | Avg or 12.07% of earnings |
Key rates for 2026/27
- National Living Wage (21+): £12.71/hour — the floor for any hourly holiday pay calculation
- National Minimum Wage (18-20): £10.85/hour
- Under 18 / Apprentice: £8.00/hour
- Personal Allowance: £12,570 — holiday pay is taxable income the same as regular pay
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Minimum wage and holiday pay calculatorFrequently asked questions
Can my employer pay me in lieu of holiday? Only for holiday entitlement that exceeds the statutory 5.6 weeks — you cannot contractually waive statutory holiday, and payment in lieu during employment is unlawful for the statutory element. You can receive payment in lieu on termination for untaken statutory holiday.
What if my employment ends mid-year? You're entitled to holiday pay for any statutory leave accrued but not taken, calculated proportionally. Conversely, if you've taken more than your accrued entitlement, your employer can claw back the excess only if your contract expressly allows it.
Does paternity or maternity leave affect the 52-week calculation? Weeks on statutory parental leave count as paid weeks for the purposes of the reference period — they don't break the chain.
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For your full net pay including tax and NI on any salary:
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Take-home pay calculator — UK 2026/27Related reading:
- National Living Wage April 2026: new rates explained
- Understanding your UK payslip
- May 2026 payslip changes: what's different this year
Sources
- gov.uk: Holiday entitlement
- ACAS: Holiday pay
- Legislation.gov.uk: Working Time Regulations 1998
- Harpur Trust v Brazel [2022] UKSC 21
- Bear Scotland Ltd v Fulton [2014] UKEATS/0047/13
- Low Pay Commission: NLW rates April 2026
Frequently asked questions
How is holiday pay calculated for variable hours workers in 2026?
Under the 52-week reference period rule (introduced by the Employment Rights Act 2018 amendment), you average your weekly pay over the 52 weeks before the holiday. Weeks with no pay are skipped, going back up to 104 weeks to find 52 paid weeks.
What is the 12.07% holiday accrual rate?
12.07% is derived from the statutory 5.6 weeks' entitlement as a proportion of the remaining 46.4 working weeks in a year (5.6 ÷ 46.4 = 12.07%). It's a quick way to calculate accrued holiday pay for workers paid by the hour with no fixed schedule.
Do bank holidays count as part of my 5.6 weeks?
There is no legal requirement for bank holidays to be additional. Your employer can include bank holidays within your 5.6 weeks' statutory entitlement — you need to check your contract.
What is the minimum holiday pay rate for 2026/27?
Holiday pay must be at least the worker's normal rate of pay — for NLW workers that is £12.71/hour from April 2026. It must also include regular overtime and commission where applicable (following the Bear Scotland ruling).
Can an employer roll up holiday pay into an hourly rate?
No. Rolling up holiday pay — adding a percentage on top of hourly pay instead of paying it when leave is taken — was effectively ended for most workers following Brazel v Harpur Trust [2022]. Employers must pay holiday pay at the point the leave is actually taken, not spread it across the year. Contracts that attempt roll-up arrangements for the statutory 5.6 weeks are unenforceable, and workers can still claim the correct amount when they take their leave.
How does the 52-week reference period work if I have gaps in work?
If any of the 52 weeks before your holiday had zero pay — for example due to unpaid sick leave, a break between contracts, or no shifts offered — those zero-pay weeks are skipped. You look back further to find 52 genuinely paid weeks, but the lookback window is capped at 104 weeks (two years). If you cannot find 52 paid weeks within 104 weeks, you average over however many paid weeks are available.
Does sick pay count when calculating holiday pay under the 52-week average?
Weeks where you received only Statutory Sick Pay (SSP) or contractual sick pay rather than your normal wages are treated as zero-pay weeks for the purposes of the 52-week reference period. They are skipped, and you look back further to find a paid week. This means a long period of sickness does not artificially depress your holiday pay — the reference period simply extends back to find 52 genuinely worked weeks.
Are part-year workers entitled to the full 5.6 weeks of holiday?
Yes. Following Harpur Trust v Brazel [2022] UKSC 21, the Supreme Court confirmed that part-year workers — including term-time workers, those on zero-hours contracts, and seasonal workers — are entitled to the full 5.6 weeks' statutory holiday, not a pro-rated fraction. The 52-week average already reduces the pay for weeks not worked; the entitlement in weeks cannot be reduced below 5.6 regardless of how many weeks per year the worker actually works.
Can I be paid for unused holiday when I leave a job?
Yes. On termination of employment you are entitled to payment in lieu of any accrued but untaken statutory holiday. The amount is calculated proportionally based on how much of the holiday year has passed. For example, if you have worked six months of a holiday year and taken only one week of your 5.6-week entitlement, you are owed pay for 1.8 weeks (2.8 accrued minus 1 taken). This payment in lieu is taxable in the normal way.
What is the time limit for making a holiday pay claim?
Claims for unlawful deduction of wages — the legal route for holiday pay disputes — must be submitted to an employment tribunal within three months less one day of the deduction, or of the last in a series of linked deductions. Before filing a claim you must contact ACAS Early Conciliation, which pauses the clock. For a series of underpayments, back-pay claims are effectively capped at two years by the Deduction from Wages (Limitation) Regulations 2014.
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Related reading
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Zero Hours Contracts UK 2026: Rights, Pay & the New Guaranteed Hours Law
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