Rolled-up holiday pay: is it legal on zero hours?

If you are on zero hours, casual, bank, term time or agency work and your manager says “holiday pay is included in your hourly rate”, do not take their word for it. Since April 2024 that phrase is only lawful in England, Wales and Scotland for irregular-hours and part-year workers, only at 12.07% on top of your normal pay, and only if it appears as a separate line on your payslip.

Who can be paid this way, and who cannot

The rule changed. Before 2024, rolled-up holiday pay was generally unlawful after the European Court case of Robinson-Steele. The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426), often called the Working Time amendment regulations, brought it back in a narrow form.

From leave years starting on or after 1 April 2024, an employer in England, Wales or Scotland can roll up holiday pay only for two groups defined in regulation 15F of the Working Time Regulations 1998:

Status does not change this. Employees and limb (b) workers have the same 5.6 weeks of statutory leave from day one and the same rolled-up pay rules. The label on your contract does not decide it either. If you are called self-employed but the boss controls when and how you work, bans a genuine substitute and you work for them alone, you may be a worker in law and owed holiday pay. Acas explains the tests in its self-employment guide. If that sounds like you, read told you are self-employed but treated like staff and zero-hours contracts: rights and reforms.

Why 12.07%, and what it must be paid on

The number is not a guess. Full-time staff get 5.6 weeks of leave and work 46.4 weeks (52 minus 5.6). Divide 5.6 by 46.4 and you get 12.07%. That keeps irregular-hours staff in line with everyone else.

Two linked rules use it:

1. Leave builds at 12.07% of hours worked. At the end of each pay period you accrue 12.07% of hours worked as leave, capped at 28 days a year. A fraction under 30 minutes rounds down to zero. Thirty minutes or more rounds up to one hour.

2. Pay is 12.07% of total normal pay. If the employer rolls up pay, it must add at least 12.07% to your total remuneration for work done that pay period, and pay it at the same time as wages. Where the contract gives more than 5.6 weeks, the percentage rises: contractual weeks divided by (52 minus contractual weeks) times 100.

Normal pay means more than basic rate. Since 1 January 2024 it must include payments linked to doing the job, status payments such as seniority or qualifications, and regular extras such as overtime, night or weekend premiums, shift allowances and commission. For rolled-up pay, the 12.07% is worked out on this pay period’s total. An employer that applies 12.07% to basic pay only and ignores your regular night premium is underpaying you. For how overtime should feed holiday calculations, see overtime pay: rules, rates and calculations.

The same test catches subtler fiddles. Bogdan works irregular fortnights in a food warehouse: 30 day hours at £13.00 (£390) plus 20 night hours at £15.50 (£310). Total normal pay is £700. Lawful rolled-up pay is £700 x 12.07% = £84.49, total £784.49. If the employer uses the £13.00 day rate for all 50 hours (£650 x 12.07% = £78.46), Bogdan loses £6.03 every fortnight.

Check your payslip in two minutes

You have a right to an itemised pay statement under section 8 of the Employment Rights Act 1996. No payslip, no check. If you get none, start with no payslip or contract: your rights.

1. Find the separate holiday line. Look for “rolled-up holiday pay”, “holiday uplift” or “statutory holiday pay” with a money figure, paid on the same payslip as wages. A contract clause alone is not enough.
2. Check the base rate first. Your pay for work done, before the holiday line is added, must itself meet the minimum wage. From 1 April 2026 that is £12.71 if you are 21 or over, £10.85 if 18 to 20, £8.00 if under 18, or an apprentice under 19 or in the first year. See National Minimum Wage: rates and rights.
3. Do the 12.07% maths. Multiply total normal pay for the period, including regular overtime and premiums, by 0.1207. The holiday line should be at least that. On £444.85, expect at least £53.69. On £700, expect at least £84.49.
4. Keep every payslip and rota. Screenshot rotas, save contracts and the Key Information Document if you are agency. From 6 April 2026 employers in Great Britain must keep six years of leave and holiday pay records, with a criminal penalty for failure, but keep your own copies.

The minimum wage trap

Rolled-up holiday pay sits on top of the minimum wage. It cannot count towards it. GOV.UK and Acas are blunt on this: normal hourly pay must meet the National Minimum Wage or National Living Wage, then the 12.07% is added.

For someone 21 or over on the 2026 floor, that means £12.71 for the work plus £1.53 holiday pay, £14.24 gross per hour worked. A job ad at £12.71 “including holiday pay” is advertising an £11.34 base rate. That is underpayment. Report it and read paid below minimum wage: how to check and what to do.

You still get time off, even when pay is rolled up

Rolled-up pay covers the money. It does not cancel the rest. If you are an irregular-hours or part-year worker on rolled-up pay, you still have the right to book and take up to 5.6 weeks as time off. Your employer cannot refuse leave because “we already paid you”. Taking the week means that week is unpaid in wages, because the holiday money already arrived in small parts through the year. Acas warns this puts some workers off taking holidays, which is part of why unions opposed the design.

Sick leave and family leave have special protection. While you are off sick or on maternity, paternity, adoption, shared parental, unpaid parental, parental bereavement, carer, neonatal or bereaved partner leave, your employer must keep paying rolled-up holiday pay each pay period at your average rate over the 52 weeks before the absence began. Example: Maya, a weekly-paid bar worker, received £1,872 in rolled-up pay across the previous year. Her average is £1,872 divided by 52 = £36 a week. For three weeks off with a broken wrist she must get £36 each week on top of Statutory Sick Pay, which since 6 April 2026 starts on day one with no lower earnings limit.

If your employer never gave a real chance to take leave, never encouraged it, or never warned that untaken leave would be lost, untaken statutory leave carries over. Irregular-hours and part-year workers carry over 100% up to 5.6 weeks until the end of the first full leave year in which the employer puts it right. Regular-hours workers carry over up to 4 weeks. If your boss blocks December requests, see boss refused every holiday request: do the days expire.

Agency and umbrella workers: where the money goes missing

Agency workers are workers from day one with the same 5.6 weeks of leave. An agency or umbrella can only use 12.07% rolled-up pay if your contract meets the irregular-hours or part-year test. Fixed regular hours through an agency means rolled-up pay is unlawful for you too.

Three checks matter more in agency work:

1. The Key Information Document. Since 6 April 2020 the agency must give you a Key Information Document before you agree terms. If rolled-up pay is used, it must say so. No document, or a document that calls the assignment rate your wage, is a red flag. From 6 April 2026 recruitment agencies also carry PAYE responsibility where umbrellas are used.

2. Equal treatment after 12 weeks. Under the Agency Workers Regulations 2010, after 12 weeks in the same role with the same hirer you are entitled to the same annual leave and holiday pay as a directly hired comparator. Rolled-up pay cannot lawfully be used to leave you permanently cheaper.

3. The assignment rate trap. Agencies often advertise an uplifted assignment rate, say £17.50 an hour for a 40-hour warehouse week (£700 to the umbrella). The umbrella then deducts employer National Insurance, employer pension, Apprenticeship Levy and its margin before working out your pay. Suppose £700 minus £20 margin, £60.50 employer National Insurance, £14 pension and £3 levy leaves £602.50 to cover wages plus holiday. Taxable pay for work is £602.50 divided by 1.1207 = £537.61 (£13.44 an hour, above the floor). Rolled-up pay is £537.61 x 12.07% = £64.89. That £64.89 must appear as a separate line and be paid out in gross pay that week. If it is shown then deducted as a “holiday fund” you never receive, challenge it. Our full breakdown is in umbrella company workers: rights and pay and agency workers: what rights do they have.

Ask the umbrella three things in writing: what part of the advertised rate is wages and what part is holiday pay, how each deduction was worked out, and why the holiday money counts as paid out rather than held back. Keep the replies with your Key Information Document. If the maths comes back short or the agency will not answer, take it to Acas and your union.

Northern Ireland and Scotland: different rules

Northern Ireland did not adopt the 2023 reforms. Part 2 of SI 2023/1426 extends only to England, Wales and Scotland. The official nidirect guidance says holiday pay should be paid when you take holiday, your employer cannot include it in your hourly rate, and existing rolled-up contracts should be renegotiated. Variable pay still uses a 12-week reference period, not the 52-week period used in Great Britain. There is no two-year backstop on deduction series after Agnew, and claims go to the Industrial Tribunal after conciliation through the Labour Relations Agency, with a three-month limit. The Employment Rights Act 2025 six-month extension does not apply there. See employment law in Northern Ireland: what differs.

Scotland follows the Great Britain rules, except for farm workers covered by the Agricultural Wages (Scotland) Act 1949. They have a fixed holiday year of 1 January to 31 December, and the 5.6 weeks cannot be paid in lieu except on leaving, so rolled-up pay does not apply to them.

Unpaid or faked: how to claim it back

Missing or fake rolled-up pay is an unlawful deduction from wages under section 23 of the Employment Rights Act 1996, or a breach of regulation 16A enforceable under regulation 30 of the Working Time Regulations. You can claim in the Employment Tribunal. Do not wait.

1. Write it down now. List each underpaid pay date, hours, rate, extras that should have counted, and what holiday line appeared. Photograph rotas and keep contracts, Key Information Documents and all payslips.
2. Ask in writing. Email: “My payslip for [date] shows [no holiday line / £X]. Under WTR regulation 16A I am an irregular-hours worker and I am owed 12.07% of [£Y total normal pay] = £Z, paid separately. Please pay arrears by [7 days].” Keep it polite and short. Join a union before you send it if you can: UNISON for care, Unite for hospitality, GMB for warehouse and logistics, IWGB for outsourced cleaners and riders. Find yours at which union should I join.
3. Get free advice. Acas, Citizens Advice and your local law centre can check the maths and deadlines. Union legal services will draft the conciliation narrative for members.
4. Start Acas early conciliation in time. In Great Britain the deadline is now 6 months minus 1 day from the payment date, or the last deduction in a series, where that date is on or after 1 October 2026. If the last deduction was before 1 October 2026, the limit is still 3 months minus 1 day from that date. Use the tribunal deadline calculator and read time limits: the new six-month deadline and can my employer take money out of my wages.
5. Claim the series. A string of underpaid payslips can be claimed as a series. In Great Britain a two-year backstop caps most deduction series. Keep every link in the chain: a gap can break it.

1. 1 Jan 2024Normal pay definition in force

   Regular overtime, commission, seniority and shift premiums count for holiday pay across Great Britain.

2. 1 Apr 202412.07% accrual and rolled-up pay begin

   For leave years starting on or after this date, irregular-hours and part-year workers accrue at 12.07% and can be paid rolled-up holiday pay under regulations 15B and 16A.

3. 6 Apr 2026Records duty and day-one sick pay

   Employers must keep six years of leave and holiday pay records. Sick pay starts on day one, which also triggers averaged holiday pay during sickness.

4. 7 Apr 2026Fair Work Agency launches

   Replaces agency standards inspection and minimum wage enforcement bodies. Holiday pay enforcement scheduled, not yet started.

5. 1 Oct 2026Six-month tribunal limit in force

   For acts or last deductions on or after this date in Great Britain, most tribunal deadlines including unlawful deductions and holiday pay move to 6 months minus 1 day.

6. Apr 2027Scheduled: holiday pay enforcement

   Fair Work Agency powers over statutory holiday pay are scheduled to start no earlier than April 2027, after consultation.