Holiday pay for irregular-hours hospitality staff

Who counts as an irregular-hours or part-year worker

The Working Time Regulations 1998, as amended by SI 2023/1426, define two groups. An irregular-hours worker is one whose paid hours in each pay period are, under the contract, "wholly or mostly variable". A part-year worker is one who is required to work only part of the leave year, with periods of at least a week in which they are not required to work and are not paid.

The government's guidance gives a hospitality worker who works a different number of hours each week as its example of an irregular-hours worker, which can include a casual or zero-hours contract. A worker on a fixed rota of 15 hours one week and 20 the next, with no overtime, is not one: the hours are fixed, even though they rotate. The contract decides which group a worker is in, so the contract has to describe the working pattern accurately.

A seasonal worker contracted to work only in spring and summer, with periods of more than a week when they are not required to work and are not paid, is a part-year worker. A seasonal hotel, beach café or outdoor bar can employ both groups. Staff on regular hours accrue holiday as before: in the first year of employment, one twelfth of the year's entitlement on the first day of each month.

The changes apply for leave years beginning on or after 1 April 2024. The 2023 regulations extend to England and Wales and Scotland. Northern Ireland has its own working time regulations.

Accrual at 12.07%

For leave years beginning on or after 1 April 2024, irregular-hours and part-year workers accrue holiday at 12.07% of the hours they work in each pay period. The figure comes from the statutory 5.6 weeks of leave: a year has 46.4 working weeks once 5.6 weeks of leave are taken out, and 12.07% of 46.4 is 5.6.

The guidance works it in three steps: divide the hours worked in the pay period by 100, multiply by 12.07, and round to the nearest hour. Less than 30 minutes rounds down, and 30 minutes or more rounds up. For a worker paid weekly who works 4 hours or fewer, the guidance says rounding up to the next half hour or hour may be appropriate so that some holiday accrues.

A worker whose contract gives more than the statutory minimum accrues at a higher percentage. The guidance's example is 6 weeks: 6 ÷ 46 × 100 gives 13.04% of hours worked. Statutory paid holiday is capped at 28 days.

Holiday accrued by a bar worker over a quarter

• April: 68 hours worked8 hours
• May: 110 hours worked13 hours
• June: 142 hours worked17 hours
• Holiday accrued in the quarter38 hours

Paying holiday pay

For irregular-hours and part-year workers, the employer chooses one of two methods. Either way, all of their statutory holiday is paid at a rate based on their total pay.

Paying when the leave is taken

Holiday pay for a week of leave is the worker's average weekly pay over the last 52 weeks in which they were paid. Weeks with no pay are left out, and so are weeks in which the worker was off sick or on statutory leave such as maternity leave, for any amount of time. The employer then counts further back for more paid weeks, but never more than 104 weeks. If that gives fewer than 52 paid weeks, the average uses the weeks there are. A worker who has been employed less than 52 weeks has the average taken over the weeks worked.

A week for this purpose runs Sunday to Saturday, ending with the last complete week before the leave starts. Where pay is calculated weekly with a week ending on another day, the week ends on that day.

A week's holiday for a worker paid in 45 of the last 104 weeks

• Weeks with pay in the 104 weeks before the holiday45
• Pay received in those 45 weeks£13,500.00
• Average weekly pay: £13,500 ÷ 45£300.00
• Holiday pay for one week of leave£300.00

Rolled-up holiday pay

Rolled-up holiday pay is allowed "for irregular hour and part-year workers only, for leave years beginning on or after 1 April 2024". It is 12.07% of the worker's total pay in each pay period, paid at the same time as the pay for the work done. The guidance says it must be "clearly marked as a separate item on each payslip".

The guidance works it in four steps: divide the period's total pay by 100 and round to the nearest penny, multiply by 12.07, and round the result to the nearest penny. Its own example is a worker paid £10.42 an hour for 35 hours in a week: £364.70 of pay gives £3.65, and 12.07 times that gives £44.06 of rolled-up holiday pay.

Before starting it, the employer checks whether it changes the contract and tells the workers. For agency workers it goes in the Key Information Document. The guidance says rolled-up holiday pay is paid on top of the worker's pay for the hours worked, which itself has to be at the minimum wage or above. If a worker on rolled-up pay is off sick or on maternity or family leave in a pay period, the holiday pay for that period is based on their average total pay over the previous 52 weeks.

A month's payslip with rolled-up holiday pay

• 80 hours at £12.71£1,016.80
• 20 late-shift hours at £14.16£283.20
• Total pay for the month£1,300.00
• Rolled-up holiday pay at 12.07%, shown as its own line£156.91
• Gross pay£1,456.91

What goes into holiday pay

For workers on regular hours, 4 weeks of the 5.6 are paid at normal pay and 1.6 weeks can be paid at basic pay. Normal pay must include payments linked to tasks the worker is contracted to do, such as commission, payments for seniority, length of service or qualifications, and other payments such as overtime that were paid regularly in the 52 weeks before the leave.

For irregular-hours and part-year workers the distinction falls away. Whichever method is used, all of their statutory holiday is paid at a rate based on total pay, so premium rates for late shifts, regular overtime and similar payments go into the figure.

Carrying leave over and leaving the job

• Workers can normally carry over up to 8 days into the next leave year, with the employer's agreement.
• An irregular-hours or part-year worker unable to take leave because of sickness can carry over up to 28 days, to be used within 18 months from the end of the leave year in which it accrued.
• Leave that could not be taken because of maternity or other family-related leave can be carried over into the next leave year.
• Where the employer refused to recognise the right to leave, did not give a reasonable opportunity to take it, or did not tell the worker it would be lost, irregular-hours and part-year workers can carry over all of it.
• A worker who leaves with holiday accrued and not taken is paid in lieu of it, worked out from the holiday left and their holiday pay rate.

With rolled-up holiday pay, leave carried over has already been paid, because the pay went out with each payslip.

Common mistakes and what a tribunal does

• Rolled-up holiday pay for staff on fixed hours. It is allowed only for irregular-hours and part-year workers.
• Rolled-up holiday pay included in the hourly rate, with no separate line on the payslip.
• 12.07% worked out on basic pay only, leaving out premium shifts and regular overtime.
• A 52-week average that includes weeks with no pay, which drags the average down.
• No accrual recorded for staff on casual or zero-hours contracts.
• No payment in lieu for accrued holiday when a seasonal worker leaves.

Underpaid holiday pay is claimed in an employment tribunal as an unlawful deduction from wages (Employment Rights Act 1996, section 23). Since 1 October 2026 the claim must be presented within six months of the last deduction in a series, up from three months. A tribunal cannot consider deductions from wages paid more than two years before the claim was presented.

Records and deadlines

• Each worker's contract, showing whether the hours are fixed, wholly or mostly variable, or part of the year.
• Hours worked in each pay period, holiday accrued at 12.07%, holiday taken and the balance.
• For the 52-week method, each week's pay and which weeks were left out and why.
• For rolled-up pay, payslips showing the holiday pay as a separate line.
• Payroll records kept for 3 years from the end of the tax year, and minimum wage records for at least 6 years.
• Tribunal claims: six months from the last underpayment in a series, with a two-year limit on how far back a claim reaches.

How we help

We set each worker's holiday method in payroll, accrue 12.07% of the hours from your rota or timesheets, and show rolled-up pay on its own payslip line. Holiday is included in every labour cost figure we report. More on payroll, tips and tronc, or try the labour cost calculator.