For leave years starting on or after 1 April 2024, employers can pay irregular hours and part year workers rolled up holiday pay: an extra 12.07% of the worker’s total pay for each pay period, paid with their wages. It must be paid at the same time as the pay for work done and shown separately on the payslip, and it cannot be used for workers with regular hours.
Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.
This page covers the rolled up method only. How irregular hours workers build up leave, and the alternative 52 week method, are covered in our guide to holiday pay for irregular hours workers.
What is rolled up holiday pay?
Rolled up holiday pay means paying a worker’s holiday pay as an uplift on every payment for work done, instead of paying it when they take leave. The rule is in regulation 16A of the Working Time Regulations 1998, which legislation.gov.uk records as inserted with effect from 1 January 2024. Government guidance says it applies for leave years beginning on or after 1 April 2024.
Regulation 16A says the uplift is 12.07% of the worker’s remuneration for work done. An employer that pays holiday pay this way is discharged from its liability to make holiday payments to the worker in the usual way under regulation 16.
Which workers can be paid rolled up holiday pay?
Government guidance says rolled up holiday pay is available for irregular hours and part year workers only.
- Irregular hours worker: someone whose paid hours in each pay period are, under their contract, wholly or mostly variable. A zero hours contract is the guidance’s example.
- Part year worker: someone who works only part of the year, with periods of at least a week in which they are not required to work and are not paid. A worker with fixed hours can still be a part year worker.
Workers with regular hours who work all year must still be paid holiday pay when they take leave. Getting the classification wrong is the main risk, so check each contract before switching a worker to the rolled up method. The guidance also tells employers to check contracts for any variation needed. Casual staff are often the group affected; see paying casual workers through payroll, and worker, employee or self employed for the status questions.
Worried about an HMRC check? Tax investigation insurance pays your accountant’s fees if HMRC opens an enquiry or compliance check. Solar Protect cover pays up to £100,000 with no excess. It never pays tax, interest or penalties.
From £108.75 a year (£9.06 a month) for individuals, £117.57 for sole traders and £207.50 for companies and partnerships, including IPT and the £20 admin fee.
See my price in 2 questions or call 01795 841 310.
★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews
How is the 12.07% worked out?
The guidance says employers should calculate rolled up holiday pay as 12.07% of a worker’s total pay in the pay period. Its own fortnightly example applies the percentage to all hours worked, including hours paid at an enhanced rate, so overtime and premium shifts are included. When rolled up holiday pay is used, the guidance says the worker’s entire leave is paid at the normal rate of pay rather than splitting it into 4 weeks at normal pay and 1.6 weeks at basic pay.
The 12.07% figure is based on the statutory minimum of 5.6 weeks’ holiday. The guidance says workers with more contractual leave need a different percentage.
| Rule | Position |
|---|---|
| Who it can be used for | Irregular hours and part year workers only |
| When it applies | Leave years beginning on or after 1 April 2024 |
| Rate | 12.07% of total pay for work done in the pay period |
| When paid | At the same time as the pay for work done |
| Payslip | Holiday pay for the period shown as a separate item |
| Leave accrual | 12.07% of hours worked, rounded to the nearest whole hour |
| Legal source | Regulation 16A, Working Time Regulations 1998 |
What does a rolled up holiday pay calculation look like?
Illustration only. Leo works in a café on a zero hours contract and is paid weekly. In one week he works 30 hours at £12.71 and 6 Sunday hours at £15.
- Total pay for work done: 30 × £12.71 = £381.30, plus 6 × £15 = £90, giving £471.30.
- Rolled up holiday pay: £471.30 × 12.07% = £56.89.
- His payslip shows £471.30 for hours worked and a separate line of £56.89 for holiday pay, so gross pay for the week is £528.19.
The £12.71 is the National Living Wage from April 2026; our page on National Living Wage rates lists all the current rates.
What must the payslip show?
The guidance says rolled up holiday pay must be clearly marked as a separate item on each payslip. Regulation 16A says any itemised pay statement must indicate the amount of holiday pay paid for the period it relates to. A combined hourly rate with no separate holiday pay figure would not show this. Our guide to P60s, P45s and payslips covers payslip rules generally.
Does the worker still take holiday?
Yes. Rolled up holiday pay changes when holiday is paid, not whether the worker gets time off. For leave years starting on or after 1 April 2024, irregular hours and part year workers accrue holiday at 12.07% of the hours they actually work in each pay period, rounded to the nearest whole hour. When they take that leave it has already been paid, and the guidance makes the same point for leave carried over. Employers should still track the hours accrued and taken; our page on holiday pay accrual covers the accounting side.
Rolled up holiday pay is optional. The guidance says employers may choose not to use it, in which case they can use the existing 52 week reference period to work out holiday pay when leave is taken.
What happens during sick leave or family leave?
A worker on sick leave or statutory leave is not earning pay for work done, so there is nothing to apply the 12.07% to. Regulation 16A deals with this: where a worker previously paid rolled up holiday pay is on such leave, the employer must make a payment in each pay period equal to the average holiday pay over the previous 52 weeks, or over a shorter period if the worker has been on rolled up holiday pay for less than 52 weeks.
How is rolled up holiday pay taxed?
It is pay, so it goes through PAYE with the wages it is paid alongside. HMRC’s employer guide lists holiday pay among the standard payments on which PAYE and National Insurance deductions are due, and tells employers to treat extra payments as part of total pay at the time they are paid. Our page on tax on overtime explains how pay that varies from period to period is taxed. HMRC can check an employer’s payroll, and the accountant’s fees for dealing with a check can be covered by tax investigation insurance.
Frequently asked questions
Can I pay rolled up holiday pay to full time staff?
No. Government guidance says it is for irregular hours and part year workers only. Workers with regular hours who work all year are paid holiday pay when they take leave.
Does rolled up holiday pay include overtime?
Yes. It is 12.07% of total pay in the period, and the government’s worked example includes hours paid at an enhanced rate.
What if the contract gives more than 5.6 weeks’ holiday?
The 12.07% figure reflects the 5.6 week statutory minimum. The guidance says workers with more contractual leave need a different percentage.
Did rolled up holiday pay apply before April 2024?
No. Government guidance says rolled up holiday pay can be used for leave years beginning on or after 1 April 2024. GOV.UK also says that for leave years beginning on or before 31 March 2024, leave entitlement for irregular hours and part year workers does not need to be accrued.
If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.
Related cover: Employers' liability insurance is a legal requirement for most employers. Ask for a quote or call 01795 841 310.
Sources
- GOV.UK: Holiday pay and entitlement reforms from 1 january 2024
- legislation.gov.uk: SI 1998/1833, regulation 16A
- GOV.UK: Holiday pay the basics
- GOV.UK: 2026 to 2027 employer further guide to paye and national insurance con
- GOV.UK: National minimum wage rates
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 November 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.