Holiday pay for zero-hours and irregular-hours workers

Three questions about variable-hours staff tend to arrive in the same week. Someone on the bar rota asks what their holiday pay should be. Someone else goes off sick and payroll asks what to pay them. And a name on the system has not worked a shift since last autumn, with nothing on file to say the arrangement ended.

All three turn on the same two facts: what each contract says about hours, and what the person was actually paid week by week.

As checked on 14 October 2026, the holiday rules for irregular hours and part-year workers are in force and apply to leave years beginning on or after 1 April 2024. Regulations 15B to 15F and 16A of the Working Time Regulations 1998 were inserted on 1 January 2024, and a separate duty to keep annual leave records, regulation 16B, came into force on 6 April 2026. Regulation 15B; Regulation 16B. The right to guaranteed hours and to reasonable notice of shifts is enacted but not in force: the government's implementation timeline, updated on 14 October 2026, lists it under 2027 with no date and says all future dates remain subject to parliamentary processes and may change. Government implementation timeline. Statutory sick pay and the statutory family payments are UK-wide; the holiday and dismissal points below apply in England, Scotland and Wales.

Decide who counts as an irregular hours worker

The holiday rules do not follow the words "zero hours" on the contract. They follow two statutory definitions, applied person by person for each leave year.

A worker is an irregular hours worker if the number of paid hours they will work in each pay period during the term of their contract that year is, under the terms of their contract, wholly or mostly variable. A worker is a part-year worker if their contract requires them to work only part of the year, with periods of at least a week in the year they are not required to work and are not paid for. Where someone holds more than one contract with you, the hours are looked at across those contracts in the round, and any sick leave or statutory leave is ignored in deciding whether they are a part-year worker. Regulation 15F.

The test rests on the terms of the contract, not the pattern that emerged. GOV.UK's worked example is a shift worker whose contracted hours are fixed across a rotating two-week pattern: he is not an irregular hours worker, and the guidance notes he works no overtime. GOV.UK on the holiday pay and entitlement reforms. A contract that guarantees a floor of hours and leaves the rest to discretion is the harder case, and it turns on what the contract says about those extra hours rather than on how many were worked last year. Where that is not obvious, check the current guidance before setting the method.

Then work out whether each person is a worker or an employee, because the later sections split on it. Statutory annual leave and the National Minimum Wage go to zero-hours workers "in the same way as regular workers", you do not have to give them work and they do not have to accept it, and you are still responsible for their health and safety. GOV.UK on zero-hours contracts. Statutory family pay and protection from unfair dismissal need employee status and continuous employment; statutory sick pay needs the person to be classed as employed for tax purposes and to have started work. Acas on statutory sick pay; GOV.UK on maternity leave and pay eligibility.

One contract term to strike out while you are in the file. A clause in a zero hours contract that stops someone working elsewhere, or requires your consent, is unenforceable against them. Section 27A, Employment Rights Act 1996. Dismissing an employee for breaching it is unfair with no qualifying period, and a worker put at a disadvantage for breaching it can complain to a tribunal, with six months to do so rather than three since 1 October 2026. SI 2015/2021, regulation 2; regulation 3; SI 2026/758. Casual staff also need a right-to-work check before the first shift, which our guide to checks for casual workers and sub-contractors sets out.

Pick one holiday pay method and show it on the payslip

For an irregular hours or part-year worker there are two lawful routes, and the main failure is running a mixture of the two.

The first is accrual. Leave builds up on the last day of each pay period at 12.07% of the hours worked in that pay period, and no one can accrue more than 28 days of leave in a leave year this way. A part-hour rounds down below 30 minutes and up at 30 minutes or more. The leave is then taken, and paid, as leave. Regulation 15B.

The second is rolled-up holiday pay. Holiday pay is paid as a 12.07% uplift to the person's pay for work done, at the same time as that pay. Acas puts the figure as at least 12.07% of total pay in the pay period. The itemised pay statement must show the amount of holiday pay for the period, as a separate payment rather than folded into an hourly rate. Regulation 16A; Acas on rolled-up holiday pay.

Rolled-up pay is for irregular hours and part-year workers, and GOV.UK puts the cut-off this way: employers can use it "unless their leave year began on or before 31 March 2024". For everyone else the position is flat. "For regular-hours workers (full- or part-time), an employer cannot include an amount for holiday pay in the hourly rate." GOV.UK on holiday pay. A part-timer on fixed shifts is a regular-hours worker, whatever the rota looks like in practice.

Paying the uplift does not buy out the time off. You still have a legal responsibility to make sure workers can take their holiday and to encourage them to take it, and Acas points out that under a rolled-up arrangement the person gets no pay in the week they are away, which can put people off going. Acas on rolled-up holiday pay. Where an employer fails to give a reasonable opportunity to take the leave, or to encourage it, or to say that untaken leave will be lost, the leave carries forward instead of expiring, until the end of the first full leave year in which the failure does not happen. Regulation 15D.

A practical approach is one line in the contract naming the method, a payslip template that shows holiday pay separately, and a quarterly note for whoever builds the rota of who has taken nothing yet.

Work out a week's pay from the weeks that were actually paid

If you are not using rolled-up pay, you calculate a week's pay when the leave is taken. The reference period is 52 weeks, and the rules on which weeks count are the part that gets missed.

Weeks in which no remuneration was payable are left out, as are weeks in which the person was on sick leave or statutory leave for any part of the week. You then go back to earlier weeks to bring the total to 52, or as close to 52 as you can get, and you cannot reach back beyond 104 weeks. Regulation 16; GOV.UK on holiday pay.

What goes into the figure is wider than basic pay. It includes commission intrinsically linked to the tasks the person must perform, payments for professional or personal status relating to length of service, seniority or professional qualifications, and other payments such as overtime paid regularly over the 52 weeks. GOV.UK adds that normal pay does not usually include bonus payments. Where the 104 weeks produce no countable weeks at all, the week's pay is the amount that fairly represents a week's pay rather than nil. Regulation 16; GOV.UK on holiday pay.

Sickness changes the sum rather than stopping it. Leave keeps accruing during sick leave or statutory leave, at 12.07% of the average weekly hours worked in the 52 weeks before the leave began, and here the weeks are treated the opposite way round: weeks of sick or statutory leave come out, but "all other weeks during the relevant period are to be taken into account, including weeks during which the worker did not work any hours". Regulation 15C. So a zero-shift week is ignored when you price a week's leave and counted when you measure accrual during sickness. Someone on rolled-up pay before going off sick keeps receiving it, as the average amount paid per pay period over the previous 52 weeks. Regulation 16A.

Check sick pay and family pay against what was actually paid

Statutory sick pay has been payable from the first full day of sickness, with no lower earnings limit, since 6 April 2026. Acas on statutory sick pay. It is UK-wide: the commencement regulations made on 25 March 2026 brought in sections 10 and 11 of the Employment Rights Act 2025 for Great Britain and sections 12 and 13, which do the same in Northern Ireland. SI 2026/373. Our guide to the day-one statutory sick pay checks covers the payroll settings and the policy wording; what follows is only the variable-hours arithmetic.

The rate is £123.25 a week or 80% of average weekly earnings, whichever is lower. Rates and thresholds for employers 2026 to 2027. The relevant period for average weekly earnings ends with the last normal payday before the first complete day of sickness and starts the day after the previous normal payday, and it must cover at least 8 weeks. For a weekly paid person, add the earnings paid in that period and divide by 8. For a monthly paid person, add the earnings, divide by 2, multiply by 12 and divide by 52. GOV.UK on working out statutory sick pay manually.

Because you divide by 8 whatever the person worked, a quiet eight weeks lowers the average and can take the 80% figure below the flat rate. That is the arithmetic working as intended. A new starter without eight weeks of paydays is worked out differently, on the earnings actually paid under the contract. GOV.UK on working out statutory sick pay manually. Two points matter for casual staff: the person must have started work and be classed as employed for tax purposes, and where the pattern is irregular you should agree with them which days count as qualifying days. Acas on statutory sick pay.

Family leave and family pay separate here, and conflating them is the common error. Statutory maternity leave does not depend on length of service: the employee needs an employment contract, and "it does not matter how long they've worked for you". GOV.UK on maternity leave and pay eligibility. Paternity leave and unpaid parental leave became day-one rights on 6 April 2026. Government implementation timeline.

The pay never is. Statutory maternity pay and statutory paternity pay both need 26 weeks of continuous employment up to any day in the qualifying week, the fifteenth week before the week the baby is due, and average weekly earnings at or above the threshold over an 8-week relevant period. GOV.UK on maternity leave and pay eligibility; GOV.UK on paternity leave and pay eligibility. Check the threshold figure rather than carrying one forward. The lower earnings limit for 2026 to 2027 is £129 a week, and as checked on 14 October 2026 the maternity eligibility page still showed £125 while the paternity page showed £129, so use the rates and thresholds page or the official calculator for a borderline case. Rates and thresholds for employers 2026 to 2027.

Gaps between shifts do not automatically break the 26 weeks. A week counts where the relationship is governed by a contract of employment for the whole or part of it, and so does a week of absence on account of a temporary cessation of work. Section 212, Employment Rights Act 1996.

Pensions turn on actual pay too. Staff aged 22 to State Pension age earning over £10,000 a year, £833 a month or £192 a week must be put into a scheme, and the Pensions Regulator states that staff whose hours and pay vary each time you pay them still need assessing. The Pensions Regulator on who to put into a pension scheme.

Keep the leave records, and close a quiet arrangement in writing

There is a holiday record duty now, and it is newer than most handbooks. Since 6 April 2026 an employer must keep records adequate to show whether it has met the annual leave entitlements, including accrual for irregular hours and part-year workers and the duty to pay for leave, and must keep them for six years from the date they were made. The regulation leaves the format to you: the records may be kept in such manner and format as the employer reasonably thinks fit. Regulation 16B.

Two other periods sit alongside it. Minimum wage records must be kept for at least six years after the end of the pay reference period following the one they cover, and in a dispute it is your responsibility to prove the minimum wage was paid. GOV.UK on enforcing the minimum wage. Since 1 October 2026 a complaint that holiday pay was not paid has six months to run rather than three. Regulation 30. Six years for hours and pay data answers all three, and our guide to the six-month tribunal time limit sets out the retention schedule. The Fair Work Agency will take on holiday pay enforcement, which the government says will not start before April 2027, and it consulted on how until 22 September 2026, with the outcome not yet published. Government guidance on the Fair Work Agency; Make Work Pay: holiday pay compliance and enforcement.

That record is also the answer to the dormant name. Nothing in the Working Time Regulations or the Employment Rights Act makes a casual arrangement lapse through inactivity, so whether it has ended depends on the contract's terms and the facts. If it has not ended, continuity may still be running: any week during the whole or part of which the relationship is governed by a contract of employment counts, and an employee continuously employed for a month or more is owed at least a week's statutory notice, and one with the qualifying period of service is owed a fair reason for dismissal. Section 86, Employment Rights Act 1996. The qualifying period is two years today. Section 108, Employment Rights Act 1996. It is scheduled to fall to six months for dismissals where the effective date of termination is on or after 1 January 2027: section 25 of the Employment Rights Act 2025 substitutes "six months" for "two years" in section 108, and regulations made on 26 May 2026 bring it into force on that date. Section 25, Employment Rights Act 2025; Commencement regulations, SI 2026/559.

Long gaps leave status and continuity genuinely uncertain, and a guide cannot resolve that for one person. Write, ask whether they want to remain available for shifts, set a date for a reply and keep the letter. Then check the current Acas guidance and seek appropriate advice before treating the arrangement as over, because closing it without notice or a reason is what turns a tidy-up into a claim.

Last, the measure that is not yet a duty. The right to guaranteed hours would require an employer to offer guaranteed hours to a qualifying worker after each reference period, with reasonable notice of shifts and payments for shifts cancelled, moved or curtailed. It is enacted and not in force: those sections of the Employment Rights Act 2025 are commenced only for specified purposes, and the length of the reference period is left to regulations that must be consulted on first. Section 1, Employment Rights Act 2025; Section 2; Section 3. Nothing is owed under it yet, and our Employment Rights Act key dates page tracks where it sits.

One preparation is worth doing anyway, because regulation 16B already requires it: be able to produce, for each person, the hours they actually worked in each week. Give that to whoever runs payroll with a date, alongside the two checks that take an afternoon: the holiday pay method named on the payslip, and the 80% sick pay figure for your lowest earners.

Common questions

How do you work out holiday pay for a zero hours worker?

If they meet the statutory test for an irregular hours or part-year worker, leave accrues at 12.07% of the hours worked in each pay period, capped at 28 days a leave year. Regulation 15B. You can either pay it when the leave is taken, calculated as a week's pay averaged over the last 52 paid weeks, or pay it as a 12.07% uplift with the wages if rolled-up pay is available to you. GOV.UK on holiday pay.

Is rolled-up holiday pay legal?

For irregular hours and part-year workers, yes. GOV.UK states that employers can use it "unless their leave year began on or before 31 March 2024", and that "for regular-hours workers (full- or part-time), an employer cannot include an amount for holiday pay in the hourly rate". GOV.UK on holiday pay. Where it is used, the amount must appear on the itemised pay statement as a separate payment. Regulation 16A.

Do zero hours workers get statutory sick pay?

They can. Since 6 April 2026 there has been no lower earnings limit and no waiting period, so sick pay is payable from the first full day. The person must have started work and be classed as employed for tax purposes. Acas on statutory sick pay. The rate is £123.25 a week or 80% of average weekly earnings over a relevant period of at least 8 weeks, whichever is lower, so a quiet eight weeks lowers the figure. GOV.UK on working out statutory sick pay manually.

How do you end a zero hours contract no one has used for a year?

Nothing in the Working Time Regulations or the Employment Rights Act makes a casual arrangement lapse through inactivity, so whether it has ended depends on the contract's terms and the facts. Continuity may still be running, because a week counts where the relationship is governed by a contract of employment for the whole or part of it, as does absence on account of a temporary cessation of work. Section 212, Employment Rights Act 1996. Write to the person, set a date for a reply, keep the letter, and seek appropriate advice before treating the arrangement as over.