FKINP Choose the holiday-pay method from the worker’s contractual pattern and leave-year dates: usual pay applies to fixed hours and fixed pay, while eligible irregular-hours and part-year workers can receive average pay during leave or rolled-up pay.[2][3] Calculate leave entitlement separately from the payment.[2][3]
Identify the rules before calculating
- Jurisdiction. This workflow covers Great Britain. The government’s 2020 calculation guidance expressly covers England, Scotland and Wales.[4] LITRG identifies a separate 12-week holiday-pay reference period for Northern Ireland; its cited page does not establish the complete local accrual and rolled-up-pay rules.[5]
- Worker status. Statutory paid-holiday rights cover workers and employees, not genuinely self-employed people.[2]
- Contractual hours. Irregular-hours workers have contractually wholly or mostly variable paid hours in each pay period. A fixed rotation of 15 hours one week and 20 the next, without overtime, is not irregular.[2]
- Part-year work. These workers are contractually required to work only part of the year, with at least one week during the contract when neither work nor pay is due. Fixed-hours workers can qualify.[2]
- Leave-year start. The irregular-hours and part-year accrual and rolled-up-pay reforms apply to leave years beginning on or after 1 April 2024—not simply payrolls after that date.[2] Without a contractual leave year, it starts on the job’s first day for jobs begun after 1 October 1998, or on 1 October for jobs begun on or before that date.[1]
- Contractual entitlement. Check whether the contract provides more than the statutory minimum.[2]
Calculate leave entitlement separately from pay
Entitlement is a balance of time off, not a payroll amount.[6] For someone working three days weekly, LITRG’s pro-rated entitlement example is 28 × 3/5 = 16.8 days.[5] This calculates leave, not what those days are worth.
For qualifying irregular-hours and part-year workers in Great Britain, in eligible leave years, statutory accrual is actual hours worked in each pay period × 12.07%.[2] Round each pay-period result to the nearest hour: fractions below 30 minutes round down; 30 minutes or more round up.[2]
Keep the unrounded calculation and rounded leave balance together. Then select the applicable payment method: the accrual percentage is not a holiday-pay formula for every worker.[2][3]
Compare the applicable payment methods
Usual pay when leave is taken
- Eligibility: Workers with fixed hours and fixed pay.[3]
- Calculation inputs: The normal pay rate. Acas’s worker earning £500 for a normal 37-hour week receives £500 for a week’s holiday.[3]
- Payment timing: Usual pay continues during leave.[3]
Average pay when leave is taken
- Eligibility: Fixed-hours workers with variable pay, and irregular-hours or part-year workers where rolled-up pay is not chosen.[3]
- Calculation inputs: Pay and hours from the applicable reference weeks, with category-specific treatment of previous holiday pay; for irregular-hours and part-year workers, use the week-selection and shorter-history rules below.[2][3]
- Payment timing: Holiday pay is paid when leave is taken.[3]
Rolled-up holiday pay
- Eligibility: In Great Britain, statutorily defined irregular-hours or part-year workers whose leave years begin on or after 1 April 2024.[2]
- Calculation inputs: Pay in each pay period × 12.07%, shown as a separate holiday-pay amount.[3]
- Payment timing: With each pay period, with no additional holiday pay when leave is taken.[3]
If switching methods changes contractual terms, seek agreement with workers or their representatives.[2] LITRG advises treating rolled-up pay as earnings for PAYE and National Insurance, and advises against using it to top up pay to the National Minimum Wage.[5]
Check whether previous holiday pay belongs in the average
Do not use one inclusion rule for every worker:
- Fixed hours with variable pay: Acas specifies the previous 52 weeks’ average hourly rate, excluding holiday pay from the reference period.[3]
- Irregular-hours and part-year workers: Acas includes holiday pay in the 52-week average, whether holiday occupied part or all of a reference week.[3]
The government’s older calculation guidance describes using weeks in which work was performed and pay earned, excluding no-pay weeks.[4] It predates the irregular-hours and part-year reforms; use the reform guidance to establish eligibility and Acas’s category-specific guidance to decide how previous holiday pay is treated.[2][3][4]
Anchor the reference period to the last complete working week ending on or before leave. A week normally runs Sunday to Saturday, but a different weekly payroll endpoint can apply.[3] Confirm how to adjust the hours denominator in an unclear mixed-pay record rather than inventing an adjustment.[3][4]
Select reference weeks for irregular-hours and part-year workers
For this worker category using average pay, work backwards to find 52 eligible paid weeks.[2] Exclude no-pay weeks and weeks containing sickness or statutory family-related leave, replacing them with earlier eligible weeks.[2] Do not exclude a week merely because it includes paid annual leave: Acas includes that holiday pay for this category.[2][3]
Stop at 104 complete weeks before the holiday, or the employment start if later.[2] If fewer than 52 eligible weeks remain, use those weeks, rather than dividing by 52 or inserting zero-pay weeks.[2] For example, use 40 eligible weeks if that is all the 104-week window contains. For a new starter, use the eligible complete weeks available since joining.[2]
Keep this pay reference-period calculation separate from leave accrual during sickness or family-related leave. Fixed-hours, variable-pay workers retain Acas’s separate treatment of previous holiday pay above; fixed-hours, fixed-pay workers use their usual pay.[2][3]
Keep the calculation steps reviewable
The entitlement and usual-pay examples above answer different questions: 16.8 days is an annual leave balance for the stated part-time pattern; £500 is the payment for a week’s holiday in Acas’s fixed-hours, fixed-pay example.[3][5] Neither establishes an irregular-hours worker’s average hourly rate.
For an eligible irregular-hours worker, keep these calculations alongside each other:
- Leave accrued: actual hours worked in the pay period × 12.07%, followed by the nearest-hour rounding step.[2]
- Average-pay alternative: select eligible reference weeks as above, then calculate the average hourly rate from the corresponding pay and hours, including previous holiday pay for this worker category; apply that rate to the holiday hours being paid.[2][3]
- Rolled-up alternative: pay in the pay period × 12.07%, paid separately with earnings rather than when leave is taken.[3]
These alternatives use different inputs: historical average pay versus pay in the current pay period.[3] Keep the leave ledger separate so payments are not mistaken for leave taken.
Illustrative calculation with a shorter history
Assume an irregular-hours worker has completed 30 employment weeks. Six were unpaid with no work, leaving 24 eligible weeks; the selected weeks contain no sickness, statutory family-related leave or annual leave. Suppose their qualifying gross pay totals £7,200 for 480 working hours. These are invented inputs to illustrate the method, not current wage rates or an individual pay assessment.[2][3]
- Reference weeks: 30 − 6 = 24, not 52.
- Average hourly pay: £7,200 ÷ 480 = £15.
- Ten hours of holiday: 10 × £15 = £150 gross, where those are the holiday hours being paid.
For comparison, if this eligible worker instead receives rolled-up pay and earns £300 in a pay period, the additional holiday-pay amount is £300 × 12.07% = £36.21. That payment accompanies the period’s earnings; it is not another payment for the same ten hours of leave. Track leave entitlement separately.[2]
Retain a calculation record another person can check
Use this recommended review checklist:
- Classification: jurisdiction, worker status, contractual working pattern, category, leave-year dates and the reason the selected rules apply.[1][2]
- Leave: pay-period frequency, actual hours worked, formula, unrounded answer, rounded result and leave taken.[2]
- Payment: selected method, pay-period or reference-week dates, underlying pay and hours, included and excluded weeks with reasons, any shortened reference period, treatment of previous holiday pay, arithmetic and payment timing.[2][3]
For variable monthly pay, the older government guidance explains allocating pay into weekly figures using hours records where reference-period boundaries cut across monthly pay periods, and excluding unpaid portions.[4] Retain those workings with the calculation. Add the source version used and reviewer notes explaining corrections.
When the ordinary calculation does not fit
Qualifying irregular-hours and part-year workers still accrue leave during sickness and family-related leave. The relevant look-back excludes weeks containing those absences and includes weeks not worked for other reasons, so the ordinary hours-worked calculation is insufficient.[2]
For an irregular-hours or part-year worker taking holiday before completing one employment week, GOV.UK says to pay a fair amount based on the job’s pay, any pay already received and comparable roles, rather than using a reference-period average.[2] For Northern Ireland, confirm the local method before adopting this Great Britain workflow: LITRG identifies a 12-week rather than 52-week reference period.[5]
References
- Holiday entitlement: Calculate leave entitlement – GOV.UK (gov.uk)
- Holiday pay and entitlement reforms from 1 January 2024 – GOV.UK (gov.uk)
- Calculating holiday pay – Holiday entitlement – Acas (acas.org.uk)
- calculating holiday pay for workers without fixed hours or pay (service.gov.uk, 2020)
- Holiday pay: information for employers | Low Incomes Tax Reform Group (litrg.org.uk)
- Holiday Entitlement 2026: Leave Rights, Minimums & How It Works (davidsonmorris.com)
