Zero-Hours Contract Holiday Pay in 2026 — How Accrual Actually Works
Zero-hours and irregular-hours workers accrue statutory holiday pay based on hours worked, using the 12.07% method. How it's calculated in 2026 and what to check on your payslip.
Why Zero-Hours Contracts Need a Different Method
Standard holiday pay calculations assume a roughly consistent working pattern — a fixed number of hours or days a week, making a proportional weekly entitlement straightforward to calculate. Zero-hours and other genuinely irregular-hours arrangements do not fit that model, since hours (and therefore earnings) can vary dramatically week to week or even go to zero in quiet periods. The 12.07% method solves this by tying holiday accrual directly to actual hours worked or pay earned, rather than to a fixed weekly assumption.
Where 12.07% Comes From
| Figure | Value |
|---|---|
| Statutory minimum holiday entitlement | 5.6 weeks a year |
| Remaining working weeks (52 − 5.6) | 46.4 weeks |
| 5.6 ÷ 46.4 | Approximately 12.07% |
Applying this percentage to hours worked or pay earned in a given period produces a proportional holiday accrual that scales naturally with however much (or little) someone actually worked, without requiring a fixed baseline.
Rolled-Up Holiday Pay: What to Look For on a Payslip
Rolled-up holiday pay must appear as a clearly identified, separate item on the payslip — an amount equal to 12.07% of the pay earned in that period for hours worked, distinct from the basic pay itself. If your payslip shows only a single combined hourly rate with no separate holiday pay line, it is worth asking your employer to confirm whether holiday pay is included and, if so, exactly how it is being itemised, since simply paying a higher blended rate without showing the breakdown does not meet the itemisation requirement.
| Payslip line | What it should show |
|---|---|
| Basic pay | Hours worked × base hourly rate |
| Holiday pay (rolled up) | 12.07% of basic pay for the same period, shown separately |
| Total gross pay | Basic pay plus holiday pay |
A Simple Worked Example
An irregular-hours worker earning £480 in basic pay for hours worked in a given pay period would accrue approximately £57.94 in rolled-up holiday pay (12.07% of £480), for a total gross pay of roughly £537.94 for that period — with both figures itemised separately on the payslip.
Tax Treatment Is Unchanged
Whether holiday pay is paid at the time leave is taken (for workers with more regular hours) or rolled up into each payslip (for irregular-hours workers), it is taxed identically to normal earnings — through PAYE, in the pay period it is paid, using the standard Income Tax and National Insurance thresholds and rates that apply to any other pay.
Use the calculator below to check your own holiday entitlement and see what a correct 12.07% rolled-up holiday pay calculation should look like on your payslip.
Frequently asked questions
What is the 12.07% method for calculating zero-hours holiday pay?
The 12.07% figure comes from the statutory minimum holiday entitlement of 5.6 weeks a year, expressed as a percentage of the 46.4 working weeks remaining once holiday weeks are excluded (5.6 divided by 46.4 is approximately 12.07%). For irregular-hours and part-year workers, this percentage is applied to hours worked (or pay earned) in a pay period to calculate rolled-up holiday pay or accrued holiday entitlement, since a fixed weekly entitlement does not make sense for genuinely variable hours.
Can my employer pay rolled-up holiday pay as an addition to each payslip instead of paying me when I actually take holiday?
Yes, for irregular-hours and part-year workers specifically, following reforms that clarified this practice — rolled-up holiday pay (an additional amount, clearly itemised, added to each payslip at 12.07% of pay for that period) is a permitted method for this category of worker. It must be shown separately on the payslip, not simply folded into a higher hourly rate without itemisation, so you can see exactly how much holiday pay you have been credited with.
Does zero-hours holiday pay accrual affect my National Insurance or tax?
No differently to normal pay — holiday pay, whether paid at the time you take leave or rolled up into each payslip, is treated as normal earnings for Income Tax and National Insurance purposes, taxed in the same pay period it is paid, using the same thresholds and rates as your regular pay.
What if I don't work every week — do I still accrue holiday pay for weeks with no hours?
You only accrue holiday pay based on hours actually worked (or pay actually earned) in a given reference period — weeks with genuinely zero hours worked do not add to your holiday accrual, since the 12.07% calculation is applied to actual worked hours or pay, not to a fixed weekly assumption. This is precisely why the percentage-of-earnings method exists for irregular-hours workers, rather than trying to force a fixed weekly entitlement onto genuinely variable work patterns.
Try the calculators
Holiday Entitlement Calculator
Calculate your statutory holiday entitlement in days and hours for full-time and part-time workers in the UK.
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Pro-Rata Salary Calculator
Calculate your pro-rata salary for part-time hours or a partial year of employment.
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Zero-Hours Contract Holiday Pay: The 12.07% Calculation Method Explained (2026/27)
How holiday pay is calculated for zero-hours and irregular-hours workers in 2026/27, the 12.07% accrual method, rolled-up holiday pay, and a full worked example.
Zero Hours Contracts 2026: Holiday Pay, Annual Leave and New Rights
Zero hours workers get 5.6 weeks holiday (28 days pro-rata). From April 2024 the 12.07% rolled-up holiday method applies. New Employment Rights Bill 2026 right to request guaranteed hours explained.
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