Holiday Pay Calculator for Zero Hours Workers UK

Holiday Pay for Zero Hours Workers: Complete Guide 2025/26

Zero hours workers are among the most common types of flexible workers in the UK, employed across hospitality, retail, healthcare, and the gig economy. Despite the name, zero hours contracts carry real statutory rights — including paid holiday. This guide explains exactly how holiday pay is calculated for zero hours workers in 2025/26, following the significant April 2024 reforms.

Statutory Holiday Entitlement for Zero Hours Workers

Every worker in the UK is entitled to 5.6 weeks of paid annual leave, regardless of their contract type. For someone working five days per week, this equals 28 days per year (including bank holidays). Zero hours workers have exactly the same entitlement — it is simply calculated differently because their working pattern is irregular.

In the first year of employment, holiday entitlement accrues at a rate of one-twelfth of the annual entitlement per complete month worked. A worker who starts in June and works through December has accrued 7 × (28 ÷ 12) = approximately 16.3 days of entitlement. Employers may round this up but cannot round down.

For zero hours workers who work irregular patterns, entitlement is measured in hours rather than days, based on actual time worked. The 5.6 weeks figure remains the benchmark.

The 52-Week Reference Period (from April 2024)

The most significant change for zero hours workers came into effect on 1 April 2024 under the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023. The reference period for calculating average weekly pay was extended from 12 weeks to 52 weeks.

The calculation works as follows: look back over the 52 complete weeks immediately before the first day of the holiday period. For each of those weeks, include it only if the worker was actually paid for work done. Exclude any weeks in which no work was performed and no pay was received. Then divide the total earnings by the number of qualifying weeks. This gives the average weekly pay figure.

If a worker has been employed for fewer than 52 weeks, use the number of weeks they have actually been employed (provided they worked in those weeks). A new worker in their fifth week simply uses the pay from weeks one through four.

Rolled-Up Holiday Pay: Now Lawful for Irregular Hours Workers

Rolled-up holiday pay is a method where employers pay an additional percentage on top of wages each pay period, rather than paying a separate amount when holiday is taken. From 1 April 2024, rolled-up holiday pay is explicitly lawful for workers with irregular hours (including zero hours workers) and part-year workers.

The rate is 12.07% of earnings. This figure represents 5.6 weeks as a proportion of the remaining 46.4 working weeks in a year (5.6 ÷ 46.4 = 12.07%). An employer using rolled-up pay must itemise it separately on payslips — it cannot be hidden in a single gross pay figure. Workers still accrue their full 5.6 weeks entitlement; they simply receive the money continuously rather than when leave is taken.

Before April 2024, the legal position on rolled-up holiday pay was uncertain. The European Court of Justice had ruled against it, and while UK tribunals applied the principle, there was no statutory basis. The 2023 Regulations settled this definitively for irregular hours and part-year workers.

The Harpur Trust v Brazel Case (2022)

The Supreme Court ruling in Harpur Trust v Brazel [2022] UKSC 21 was a landmark decision that significantly impacted part-year workers. The case involved a music teacher on a permanent zero-hours-style contract who only worked during term time. The Supreme Court held that her holiday entitlement must be calculated as a proportion of the 52-week average, not capped at 12.07% of her part-year earnings.

In practical terms, this meant that some part-year workers on permanent contracts were entitled to more holiday pay than the 12.07% rolled-up formula would produce. Parliament responded by introducing the 2023 Regulations, which created a specific accrual method for irregular hours and part-year workers that effectively limits entitlement to 12.07% of hours worked, restoring a more proportionate outcome.

Employment Rights Bill 2024: Zero Hours Worker Protections

The Employment Rights Bill 2024 introduced several significant protections for zero hours workers that are being phased in from 2025 onwards. The key provisions include: a right to a guaranteed hours contract after 12 weeks of regular work (where the employer must offer a contract reflecting actual hours worked); reasonable notice of shifts; compensation for cancelled or curtailed shifts at short notice; and protection against being moved to zero hours to avoid these rights.

These changes represent the most significant reform of zero hours worker rights since the introduction of the Agency Workers Regulations 2010. Workers who are regularly offered and accept the same pattern of work will have a legitimate expectation of continued work and will be entitled to a contract reflecting that reality.

Holiday Pay During Sickness

If a zero hours worker is too unwell to take annual leave, they continue to accrue holiday entitlement during sick leave. They cannot be compelled to take annual leave during a period of sick leave. If a worker falls ill during a period of pre-arranged annual leave, they may be able to reclassify those days as sick leave and take the holiday at a later date, but they must notify the employer and follow the normal sickness absence procedure.

The key principle is that holiday entitlement which cannot be taken due to sickness can be carried over into the next leave year. This carry-over right was confirmed in Stringer v HMRC and subsequent UK cases applying the Working Time Directive principles.

What Counts as "A Week's Pay" for Zero Hours Workers?

The legal definition of a week's pay for workers without normal working hours (including zero hours workers) is found in Part XIV of the Employment Rights Act 1996. The calculation includes: basic pay, overtime pay that is worked regularly and on a recurring basis, commission that forms part of normal remuneration, and allowances payable regularly as part of normal remuneration.

Excluded from the calculation are: one-off bonuses, expenses, payments not referable to work done, and genuine overtime that is truly voluntary and not worked regularly. The distinction between "regular overtime" and "genuinely voluntary overtime" can be contested, but Employment Tribunals have generally held that where overtime is offered and accepted as a matter of course, it should be included in the holiday pay calculation. This principle was confirmed in Bear Scotland Ltd v Fulton [2015].

Employer Obligations for Zero Hours Holiday Pay

Employers must not prevent workers from taking their statutory holiday entitlement. Attempting to substitute holiday entitlement with a cash payment (other than on termination) is unlawful. Employers must keep adequate payroll records to enable the 52-week average to be calculated correctly. Workers are entitled to request a written breakdown of how their holiday pay was calculated.

Where a worker believes their holiday pay has been incorrectly calculated, they may raise a grievance internally and, if unresolved, bring a claim to an Employment Tribunal under the Working Time Regulations 1998. Claims must generally be brought within three months of the underpayment. A series of underpayments may constitute an unlawful deduction from wages under the Employment Rights Act 1996.

Frequently Asked Questions