The 12.07% Holiday Pay Method: A Payslip Checklist for Irregular Hours Workers
How the 12.07% rolled-up holiday pay method works for irregular-hours and part-year workers under the law formalised from April 2024, why that specific percentage is used, and how to check it's being applied correctly on your payslip.
Why 12.07% specifically — the maths behind the number
The 12.07% figure isn't an arbitrary round number — it's derived directly from the UK's statutory minimum holiday entitlement. Every full-time worker is entitled to at least 5.6 weeks of paid annual leave a year. A calendar year has 52 weeks, so the number of weeks actually worked, once statutory leave is set aside, is:
52 weeks − 5.6 weeks = 46.4 working weeks
Dividing the leave entitlement by the working weeks gives the percentage uplift needed on every hour actually worked to fund that leave in advance:
5.6 ÷ 46.4 = 0.1207, or 12.07%
So for every £1 of basic pay earned for hours actually worked, an irregular-hours worker under this method should also receive 12.07p of holiday pay, paid at the same time rather than held back until leave is taken.
Who this method applies to
The 12.07% percentage method is specifically for irregular-hours workers and part-year workers — people whose contracted hours genuinely vary from week to week, or who only work for part of the year under a permanent contract, such as term-time-only school support staff. It doesn't apply to workers with regular, predictable hours, who continue to build up and take holiday under the standard method, calculated from an average week's pay when leave is actually taken.
Irregular-hours / part-year worker (12.07% method)
- Holiday pay accrues as a percentage of pay for each period actually worked
- Paid on every payslip, at the same time as basic pay
- No separate "average week's pay" calculation needed at the point leave is taken
- Formalised in law for holiday years starting on or after 1 April 2024
Regular-hours worker (standard method)
- Holiday pay is calculated from average earnings when leave is actually taken
- Paid separately, at the time the worker takes leave, not spread across every payslip
- Requires an averaging calculation (typically over a reference period) at the point of taking leave
- Unaffected by the 2024 reforms — continues as before
Where this came from: the Harpur Trust case
The current rules trace back to Harpur Trust v Brazel, a Supreme Court case decided in 2022 involving a music teacher employed on a permanent, term-time-only contract. The court found she was entitled to the full 5.6 weeks of statutory leave, calculated using the standard averaging method that existed at the time — even though, proportionally, she worked far fewer weeks a year than a full-time employee, which meant her holiday entitlement worked out disproportionately generous relative to hours actually worked.
That ruling created real complexity and cost for employers with genuinely part-year and irregular-hours staff. The government responded by amending the Working Time Regulations, introducing the capped 12.07% percentage method specifically for irregular-hours and part-year workers, with effect from holiday years starting on or after 1 April 2024 — giving employers a clearer, more predictable calculation while preserving the underlying statutory entitlement.
What should actually appear on your payslip
Because rolled-up holiday pay is paid alongside ordinary earnings rather than separately when leave is taken, transparency matters. Your payslip should show:
| Payslip line | What it represents |
|---|---|
| Basic pay for hours worked | Pay for the shifts/hours actually worked in the period |
| Holiday pay (12.07%) | A separate, itemised amount — not folded silently into the hourly rate |
| Total gross pay | Basic pay plus holiday pay combined |
If your payslip shows only a single combined figure with no separate holiday pay line, it doesn't meet the transparency standard the regulations expect, and it becomes much harder to verify you're receiving the correct 5.6 weeks' worth of holiday pay across the year.
Worked example: a zero-hours retail worker
Consider a zero-hours worker who's paid £13 per hour and works a variable number of shifts each week. In one particular week, they work 30 hours.
| Item | Calculation | Amount |
|---|---|---|
| Basic pay for hours worked | 30 hours × £13 | £390.00 |
| Holiday pay (12.07%) | £390.00 × 0.1207 | £47.07 |
| Total gross pay for the week | £437.07 |
The following week, the same worker only picks up 12 hours:
| Item | Calculation | Amount |
|---|---|---|
| Basic pay for hours worked | 12 hours × £13 | £156.00 |
| Holiday pay (12.07%) | £156.00 × 0.1207 | £18.83 |
| Total gross pay for the week | £174.83 |
Because the uplift is a fixed percentage of whatever is actually earned, the holiday pay tracks the worker's real hours automatically — busier weeks generate proportionally more holiday pay, and quieter weeks generate less, without any separate reconciliation needed at year end. Check your own hourly rate and expected pattern against
Holiday Entitlement Calculator
Calculate your statutory holiday entitlement in days and hours for full-time and part-time workers in the UK.
Open Holiday Entitlement calculatorHow this differs from the pre-2024 position
Before the April 2024 reforms, employers of genuinely irregular-hours and part-year workers faced real uncertainty about how to calculate holiday pay correctly, following an earlier line of case law that had cast doubt on rolled-up holiday pay as a method, even though many employers continued using it informally because the alternative — averaging pay over a reference period each time leave was taken — was administratively difficult for workers whose hours changed constantly. Some employers responded by defaulting to the standard 52-week reference period averaging method regardless of how irregular a worker's hours were, which the Harpur Trust ruling showed could produce disproportionately generous results for genuinely part-year staff. The 2024 reforms resolved this uncertainty by giving employers of irregular-hours and part-year workers a clear, lawful alternative — the 12.07% method — specifically tailored to that group, while leaving the standard averaging method in place, largely unchanged, for workers with regular hours.
Reference period averaging: the method it replaced for this group
For context, it helps to understand what the 12.07% method is an alternative to. Under the standard method still used for regular-hours workers, holiday pay is calculated by averaging a worker's pay over a reference period (52 weeks, looking back over paid working weeks only) at the point they take leave, then paying that average for each week of leave taken. This works reasonably well for someone with broadly consistent hours, but becomes cumbersome and can produce volatile results for someone whose hours swing sharply from week to week — a worker who happened to work several unusually busy weeks just before their reference period would get an inflated holiday payment, while one who'd had a run of quiet weeks would get an artificially low one. The 12.07% method avoids this volatility by tying holiday pay directly and proportionately to whatever's actually earned in each specific pay period, rather than to an average drawn from a potentially unrepresentative recent period.
Worked example: a term-time-only support worker
The 12.07% method isn't limited to zero-hours retail or hospitality roles — it also applies to part-year workers on permanent contracts, such as school support staff who only work during term time. Consider a teaching assistant on a permanent contract who works only during term weeks, paid £14.50 an hour, working an average of 32.5 hours a week across roughly 39 term weeks a year.
| Item | Calculation | Amount |
|---|---|---|
| Weekly basic pay (term week) | 32.5 hours × £14.50 | £471.25 |
| Weekly holiday pay (12.07%) | £471.25 × 0.1207 | £56.88 |
| Total weekly gross pay during term weeks | £528.13 | |
| Annual basic pay (39 term weeks) | £471.25 × 39 | £18,378.75 |
| Annual holiday pay | £18,378.75 × 0.1207 | £2,218.10 |
Across the year, this worker's holiday pay entitlement comes to roughly £2,218, paid out incrementally across each of the 39 term-week payslips rather than as a single lump sum, or as separate paid weeks off during the school holidays. This is precisely the kind of part-year working pattern the Harpur Trust case originally concerned, and the 12.07% method now gives both employer and worker a clear, calculable figure rather than relying on the more complex averaging approach the case exposed as problematic. Compare your own pattern using
Pro-Rata Salary Calculator
Calculate your pro-rata salary for part-time hours or a partial year of employment.
Open Pro-Rata Salary calculatorAgency workers and umbrella companies
The 12.07% method is also common among agency workers and those employed through umbrella companies, where irregular assignments and variable weekly hours are the norm rather than the exception. Because an umbrella company or agency typically processes pay for many different end clients and assignments, the rolled-up holiday pay uplift gives a consistent, portable way of accruing holiday entitlement that doesn't depend on which client the worker happened to be assigned to in a given week. If you work through an agency or umbrella company, the same payslip transparency expectations apply — you should be able to see basic pay for the assignment and the 12.07% holiday pay uplift shown as distinct figures, even though the underlying assignment and end client may change from week to week.
What to check if something looks wrong
- Confirm your payslip shows basic pay and holiday pay as separate, labelled lines — not one combined figure.
- Check the holiday pay line is roughly 12.07% of your basic pay for the period (or higher, if your contract provides enhanced holiday above the statutory minimum).
- If you regularly work guaranteed overtime, check whether it's included in the pay the 12.07% is calculated against, since normal remuneration should generally be reflected.
- If in doubt, ask your employer or HR for a written explanation of how the figure on your payslip was calculated — it should be a straightforward, checkable calculation, not a black box.
Frequently asked questions
Where does the 12.07% figure actually come from?
It comes from the ratio of statutory annual leave to working weeks in a year. UK statutory minimum holiday is 5.6 weeks a year. A full working year has 52 weeks, so the number of weeks actually worked is 52 minus 5.6, which equals 46.4 working weeks. Dividing the 5.6 weeks of leave by the 46.4 weeks worked gives 0.1207, or 12.07%. In other words, for every hour worked, 12.07% of an additional hour's pay represents the holiday entitlement being built up alongside it.
Who does the 12.07% method actually apply to?
It applies specifically to irregular-hours workers and part-year workers — broadly, anyone whose hours vary week to week under their contract, or who only works part of the year (such as term-time-only staff), and who doesn't have a fixed, regular working pattern that would make a simple 'average week's pay' calculation straightforward. Workers with genuinely fixed hours and a regular working pattern continue to accrue and take holiday under the standard method rather than the percentage-based approach.
Is rolled-up holiday pay legal in the UK?
Yes, for irregular-hours and part-year workers specifically, since the Working Time Regulations were amended with effect from holiday years starting on or after 1 April 2024. Before that change, rolled-up holiday pay (paying an uplift on every payslip instead of separate holiday pay when leave is taken) existed in practice for many zero-hours arrangements but sat in a legal grey area following earlier case law that had cast doubt on it. The 2024 changes put it on a clear statutory footing for this specific group of workers, while regular-hours workers still take holiday pay in the traditional way — paid when leave is actually taken, calculated from average earnings.
What should I actually see labelled on my payslip if I'm paid rolled-up holiday pay?
HMRC and the Working Time Regulations require rolled-up holiday pay to be itemised separately on the payslip, not simply folded invisibly into your hourly rate. You should be able to see your basic pay for hours worked as one line, and a distinct holiday pay line calculated at 12.07% of that basic pay (or of your total pay for the period, depending on how your employer has structured it) as a second line. If your payslip only shows one combined figure with no breakdown, ask your employer to show the calculation — it should be checkable, not just a bigger hourly rate with no stated holiday component.
Why was this change introduced, and what is the Harpur Trust case?
The 2024 reforms followed the Supreme Court's 2022 ruling in Harpur Trust v Brazel, which found that part-year workers (such as term-time-only staff on permanent contracts) were entitled to the full 5.6 weeks of statutory leave, calculated using the existing 52-week averaging method, even though they didn't work anything close to a full 52-week year — producing a proportionally larger holiday entitlement relative to hours worked than many employers had assumed. That ruling created significant complexity and cost for employers with genuinely part-year staff, prompting the government to introduce the clearer, capped 12.07% percentage method specifically for irregular-hours and part-year workers from April 2024.
Does 12.07% holiday pay mean I'm not entitled to actually take time off?
No — you're still entitled to take paid time off work under the Working Time Regulations. What rolled-up holiday pay changes is only the timing and mechanism of payment: instead of receiving a separate, larger payment when you take a period of leave, you receive the holiday pay uplift spread across every payslip as you earn it, and any time you then take off is unpaid at the point you take it because the pay for it has already been received in advance. Employers are still required to give workers a reasonable opportunity to take leave and to encourage them to do so.
How do I calculate my own rolled-up holiday pay for a pay period?
Multiply your gross pay for hours actually worked in the pay period by 12.07%. For example, if you earned £480 in basic pay for a week's shifts, your rolled-up holiday pay for that week would be £480 × 0.1207, which is approximately £57.94, on top of the £480 basic pay — giving total gross pay of roughly £537.94 for the week. You can sanity-check your own figures against a payslip using CalcHub's <CalcLink slug='holiday-entitlement' /> calculator.
Does overtime or a bonus count when calculating the 12.07% uplift?
It depends on your employer's policy and contract, but generally regular, guaranteed overtime and certain other regular payments should be included in the calculation of holiday pay to comply with wider Working Time Regulations case law on what counts as 'normal remuneration.' If your rolled-up holiday pay is only ever calculated on a bare basic hourly rate while you regularly work paid overtime that's excluded from the calculation, it's worth querying whether that's correct, since holiday pay is generally meant to reflect normal pay, not just a minimum base rate.
What if my payslip shows a different percentage, not 12.07%?
12.07% is the figure that corresponds to the UK statutory minimum of 5.6 weeks' leave. If your contract or workplace policy provides for more than the statutory minimum — for example, some employers offer additional contractual holiday on top of the legal minimum — the percentage used for rolled-up holiday pay should be correspondingly higher to reflect that enhanced entitlement. A percentage lower than 12.07% for a worker only entitled to the statutory minimum would be worth querying directly with your employer or checking against ACAS guidance.
Can my employer just increase my hourly rate instead of showing a separate holiday pay line?
No — the law requires rolled-up holiday pay to be clearly identified as a separate item on the payslip, distinct from pay for hours worked, even though both amounts are paid at the same time. An employer simply increasing the headline hourly rate without a visible, itemised holiday pay component doesn't meet the transparency requirement, and makes it much harder for a worker to check they're actually receiving the correct 5.6 weeks' worth of holiday pay across the year.
What happens if I leave my job partway through the year — do I lose any holiday pay?
No — because rolled-up holiday pay is paid out as you go, on every payslip alongside hours worked, there's no accrued-but-unpaid holiday balance to settle when you leave in the same way there can be for workers on the traditional accrual system. This is one of the practical advantages of the rolled-up method for genuinely irregular-hours workers who move between jobs frequently, since it removes the need for a separate final payslip calculation of unused holiday entitlement.
Related reading
Rolled-Up Holiday Pay 2026/27: The 12.07% Uplift for Irregular Hours and Part-Year Workers
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