Rolled-Up Holiday Pay 2026/27: The 12.07% Uplift for Irregular Hours and Part-Year Workers

What rolled-up holiday pay actually means

Rolled-up holiday pay is a way of paying statutory holiday entitlement not as a separate payment when leave is taken, but as a built-in uplift added to every payslip based on hours actually worked. Instead of receiving your normal rate while off on annual leave, you receive an enhanced hourly or daily rate throughout the year, with the enhancement representing your holiday pay having effectively been paid in advance.

For most of the last two decades, this approach sat in a legal grey area — and for regularly-hours workers, it was generally treated as unlawful, following the European Court of Justice's ruling in Robinson-Steele v RD Retail Services (2006), on the basis that rolling holiday pay into normal wages could discourage workers from actually taking their leave, undermining the health-and-safety purpose of statutory holiday rights.

That changed with reforms to the Working Time Regulations 1998, which took effect for holiday years starting on or after 1 April 2024. These reforms created a specific, lawful route for rolled-up holiday pay — but only for a defined category of workers: those with irregular hours, and those who work only part of the year.

Who it applies to: irregular-hours and part-year workers

The 2024 reforms define two categories of worker who can lawfully receive rolled-up holiday pay:

A zero-hours retail worker whose shifts vary week to week is a textbook irregular-hours worker. A school exam invigilator or term-time-only teaching assistant, who has defined weeks off during school holidays each year, is a textbook part-year worker. A full-time office worker on fixed 37.5-hour weeks all year round is neither, and cannot lawfully be moved onto rolled-up holiday pay just because it suits the employer's payroll administration.

Worked example 1: the 12.07% calculation from first principles

The 12.07% figure isn't arbitrary — it's derived directly from the statutory minimum leave entitlement.

This means that for every hour a worker is paid for actual work, an additional 12.07% is added to represent the value of the statutory holiday entitlement built up by that hour of work. Spread evenly like this, a worker who works highly variable weeks still accrues holiday pay in direct proportion to hours actually worked, without needing a fixed reference period.

Worked example 2: what it looks like on a real payslip

Consider Aisha, an irregular-hours care worker paid £13.50/hour, who works 34 hours in a particular week.

Her payslip should separately itemise the £55.40 as holiday pay, not fold it silently into a single combined hourly rate — this transparency requirement was written into the 2024 reforms specifically so workers can see that their holiday entitlement is genuinely being funded, not simply absorbed into a generically "enhanced" rate. Check your own hours and rate against the same method using

.

Worked example 3: comparing rolled-up pay against take-home impact over a year

Rolled-up holiday pay changes the shape of your payslips but not, in principle, your total annual entitlement. Consider Tom, a part-year exam invigilator who works 20 weeks a year at an average of 25 hours/week, at £14/hour.

This £7,844.90 also needs to be run through the normal PAYE and National Insurance calculations that apply to any earnings — check the effect on your take-home figure with

, since the rolled-up holiday pay addition counts as ordinary taxable earnings in the pay period it's received, exactly like the rest of your wages.

Rolled-up pay vs the calendar-week averaging method

Part-year and irregular-hours workers may encounter two different lawful methods for calculating their holiday pay, and it's worth understanding how they compare, because they don't always produce identical results.

For some part-year workers with concentrated, high-intensity working periods, the calendar-week method can produce a higher effective holiday pay outcome than the 12.07% method, because it isn't diluted across the full 52 weeks of the year including unpaid weeks. Employers are permitted to choose either lawful method for qualifying irregular-hours and part-year workers, but must apply it consistently and transparently.

What to check if you think you're being underpaid

If you're on rolled-up holiday pay, confirm three things: first, that you genuinely meet the definition of an irregular-hours or part-year worker rather than simply having been moved onto this method for convenience; second, that the 12.07% is being applied to your correct gross pay for hours worked, not a reduced base figure; and third, that the holiday pay element is clearly itemised as a separate line on your payslip, as required under the 2024 reforms. If any of these don't check out, you may have grounds to query the calculation or, in cases of a genuine and ongoing underpayment, pursue it as an unlawful deduction of wages.

Bottom line

Rolled-up holiday pay is now a lawful and increasingly common way of handling holiday pay for irregular-hours and part-year workers, provided the 12.07% uplift is calculated correctly and shown transparently on your payslip. Use

to check your own uplift is right, and cross-check the effect on your overall take-home pay with before assuming your payslip reflects everything you're owed.