Zero Hours Holiday Pay 2026 — How to Calculate Exactly What You're Owed

If you work on a zero-hours contract or your hours vary week to week, calculating your holiday pay can feel like trying to solve a puzzle. The law has changed multiple times in recent years, leaving many workers—and even some employers—completely confused about what is actually owed.

The most important thing to know is this: zero-hours workers have exactly the same statutory right to paid holiday as full-time salaried workers. You are legally entitled to 5.6 weeks of paid annual leave per year. The only difference is how that pay is calculated.

Here is exactly how to calculate your zero-hours holiday pay in 2026, using both the 12.07% method and the 52-week average method.

Are Zero-Hours Workers Entitled to Holiday Pay?

Yes. The law states that almost all workers in the UK, including agency workers, casual staff, and those on zero-hours contracts, are legally entitled to 5.6 weeks (28 days for a full-time worker) of paid statutory holiday each year.

Your employer cannot legally tell you that holiday pay is "included in your hourly rate" (known as rolled-up holiday pay) unless they meet very specific new criteria introduced in 2024 for irregular hours workers. Even then, it must be clearly shown as a separate line item on your payslip.

Method 1 — The 12.07% Accrual Method (Step by Step)

For most zero-hours and irregular-hours workers, employers use the 12.07% accrual method. This method was technically outlawed for a brief period following a Supreme Court ruling but was legally reinstated for holiday years starting on or after 1 April 2024.

It works on a simple premise: 5.6 weeks of holiday is exactly 12.07% of the total working weeks in a year (46.4 weeks). Therefore, for every hour you work, you accrue just over 7 minutes of paid holiday.

Worked Example: 20 Hours at £12.71/hr

Let's say you worked 20 hours last week, and you are paid the National Living Wage of £12.71 per hour.

• Your gross pay: 20 hours × £12.71 = £254.20
• Holiday pay accrued: £254.20 × 12.07% (0.1207) = £30.68

Your employer holds this £30.68 in a holiday "pot". When you take time off, they pay you out of this pot. Alternatively, if your employer uses legal "rolled-up" holiday pay, this £30.68 will be paid to you immediately in that week's payslip as a clearly marked separate item.

Method 2 — The 52-Week Average Method

If your employer doesn't use the 12.07% accrual method, or if you take a block of holiday and need to know what a "week's pay" looks like, the law requires them to use the 52-week reference period.

Under this method, your employer must look back at the last 52 weeks in which you actually earned money. They add up your total pay for those 52 weeks and divide it by 52 to find your average weekly pay.

What If You Had Weeks With No Pay?

This is where zero-hours contracts get tricky. If you didn't work (and therefore earned £0) for 4 weeks out of the last 52, your employer cannot include those zero-pay weeks to drag your average down.

Instead, they must skip those zero-pay weeks and go further back in time—up to a maximum of 104 weeks (two years)—until they have found 52 actual weeks of pay to average out. If you have been employed for less than 52 weeks, they average your pay over the total number of weeks you have worked.

Which Method Should Apply to You?

In 2026, employers can legally choose either method for zero-hours workers, provided they calculate it correctly. Check your employment contract or ask your HR department which method they use. If they use the 12.07% method but do not clearly itemize it on your payslip (if rolled up), they are breaking the law.

Employment Rights Act 2025 — What Changed for Zero-Hours Workers

The Employment Rights Act 2025 brought sweeping changes to zero-hours contracts. While it didn't ban them outright, it gave workers the right to request a guaranteed-hours contract if they work regular hours over a specific reference period. It also introduced rights to reasonable notice of shifts and compensation for shifts cancelled at the last minute.

These changes mean your working hours may become more predictable, which in turn makes your holiday pay much easier to calculate and rely on.

What to Do If Your Employer Refuses to Pay Holiday Pay

Unfortunately, some employers still attempt to deny casual workers their holiday pay. If your employer refuses to pay you what you are owed:

1. Raise it formally: Write a polite email to your HR or payroll department asking for a breakdown of your holiday pay calculation.
2. Contact ACAS: If they refuse, contact ACAS (the Advisory, Conciliation and Arbitration Service) for free, impartial advice.
3. Tribunal Claim: You can take your employer to an Employment Tribunal for "unlawful deduction from wages." Note that you only have 3 months (minus one day) from the date the holiday pay was refused to start this process.

Frequently Asked Questions

How is holiday pay calculated on a zero-hours contract?

You are entitled to 5.6 weeks of paid holiday per year. If your hours vary, your employer will likely use the 12.07% method (12.07% of your total earnings) or the 52-week average weekly pay method.

What is the 12.07% holiday pay rule?

It comes from dividing your 5.6 weeks of holiday by the 46.4 weeks you actually work in a year (5.6 / 46.4 = 12.07%). By multiplying your earnings by 12.07%, you accrue holiday pay perfectly in line with your legal 5.6-week entitlement.

Can my employer refuse to pay my holiday pay if I'm on zero hours?

No. Holiday pay is a statutory right for almost all workers, regardless of contract type. Refusal to pay is an unlawful deduction of wages.

Do bank holidays count for zero-hours workers?

You are entitled to 5.6 weeks total (28 days for full-time equivalents). This total can include bank holidays if your employer chooses. Whether bank holidays are paid on top of your standard entitlement depends entirely on your specific employment contract.