Holiday accrual for irregular hours and part year workers including rolled up holiday pay
“Rolled-up holiday pay” refers to a practice whereby the employer pays you an additional amount on top of your normal hourly rate of pay, with the additional amount intended to represent your holiday pay, instead of you taking the time off at the time you receive the payment.
This is usually calculated at the rate of 12.07% on top of the hourly rate of pay, representing a worker’s statutory entitlement to a legal minimum of 5.6 weeks of holiday each year, as a proportion of a working year of 46.4 weeks.
For example, if you receive the national living wage rate of £11.44 per hour (as at April 2024) then you would be paid an additional £1.38 as rolled-up holiday pay for every hour that you work.
Previously the practice of paying rolled-up holiday pay had been unlawful in all cases, however, for holiday years starting from 1 April 2024 rolled up holiday will be allowed in respect of irregular hours or part year workers only. The holiday pay must be calculated at 12.07% of all pay for work done and must be paid at the same time for the work done. Holiday pay must also be itemised separately on your payslip. Employers using rolled-up holiday pay should calculate it based on your total pay in a pay period. A pay period is the frequency at which you get paid, i.e weekly, fortnightly, monthly etc.
You will be considered an irregular hour worker: if the number of paid hour that they will work in each pay period is, under the contract, “wholly or mostly variable”. This would apply to zero hours contracts for example.
You will be considered a part year worker if you are required to work only part of the year, with periods of at least a week which you are not required to work and you are not paid for. This includes part year workers who may have fixed hours, for example a teaching assistant who only works and gets paid during term time.
In all other cases, rolled up holiday pay remains unlawful.
Even if you are paid rolled up holiday pay, it is important to remember that your employer must still make sure that you have a t least 5.6 weeks off every year, the difference is that if you are paid on a rolled up holiday pay basis, when you do take holiday, as your holiday pay will already have been accounted for in the rolled up holiday pay element of your wages, it will be unpaid.
If your employer does not use rolled up holiday pay and you are a part year or irregular hours worker, then you employer can use the existing 52 week reference period method to look back at your previous paid 52 weeks to calculate what you should be paid for a week’e leave. Only weeks where you have worked and been paid should be used for the calculation and if for any of the 52 weeks you got no pay at all, an earlier week should be used in its place. Your employer should only count back as far as needed to get 52 weeks of your usual pay up to a maximum of 104 weeks. If you have not yet been employed for 52 weeks, your employer should look at the average pay you have received for the number of full weeks you have been employed.
Holiday calculations for part year and irregular hours workers are complex and the government has produced useful guidance on how holiday and holiday pay should be calculated (with helpful example holiday pay calculations for part year and irregular hours workers covering different scenarios).
Holiday accrual and Rolled up holiday pay during Maternity leave in respect of part year and irregular hours workers
Workers continue to accrue statutory annual leave during any period of statutory maternity leave in the same way as if they had been at work. Your employer will therefore have to calculate how much leave you have accrued while on maternity leave.
For holiday years starting on or after 1st April 2024, if you are a part year or irregular hour worker then your employer should calculate how much holiday you have accrued based on the average hours that you worked per week over the 52 weeks (the relevant period) preceding the start of your maternity leave. When calculating the average hours worked weekly, your employer should not include weeks where you were on maternity or family related leave or off sick for any period of time. However, any weeks you did not work for any other reason should be included. If you have not worked for your employer for 52 weeks, the relevant period is shortened to the number of weeks you have worked for your employer. The average number of hours per week is worked out by dividing the total number of hours worked over the 52 week period by 46.4 (this is the total number of potential weeks you could have worked, ie 52 weeks minus 5.6 weeks of annual leave). This figure is then used to work out the number of hours of annual leave accrued by dividing it (the average number of hours per week) by 100 and then multiplying by 12.07. This figure can then be multiplied by the number of weeks you were on maternity leave in order to get the total number of hours of annual leave accrued while on maternity of other family related leave.
The government has produced guidance on how to calculate holiday and holiday pay entitlement which contains helpful example holiday pay calculations covering different scenarios including part year/irregular hours workers during maternity leave as well as rolled up holiday pay.
By law, if a worker is unable to take their annual leave due to being on maternity leave, the employer is required to allow them to carry it over into the following leave year.
There are three ways in which your employer might choose to manage this issue:
- Pay in lieu. Your employer could choose to pay you in lieu of the holiday entitlement that you have accrued during your maternity leave, upon your return to work. (Payment in lieu means simply payment “in place of/instead of” something else, in this case, the annual leave). If you have taken maternity leave then your employer should use the method for calculating your holiday accrual during your maternity leave based on the method above and would need to pay you for the relevant amount of accrued holiday .
We should emphasise that this payment in lieu option is unlawful. The only way your employer can lawfully comply with your rights in respect of statutory holiday accrued during maternity leave is to permit you to take that period of leave AND pay you for it at the time that the leave is taken. However, if your employer has made a payment in lieu to you in respect of your holiday entitlement it is unlikely to be worthwhile for you to try and challenge this. This is because the effort and time involved in bringing a claim is unlikely to be worth it as you have not suffered financially. - Requiring the accrued leave to be added onto the end of your maternity leave. Your employer could choose to tell you that you must take the period of holiday entitlement which you have accrued during your maternity leave immediately following the end of your maternity leave period (thereby delaying the date of your return to work until after the period of annual leave).
- Allowing the accrued leave to be taken at another time and paying you the correct amount for it. Your employer could choose to tell you to take the accrued leave at some other time following your return from maternity leave (or could agree your request to take the accrued leave at some other time following your return) and pay you the correct holiday pay which is due to you at the time the leave is taken.
Discussing the matter with your employer
If your employer refuses to let you take your accrued holiday (and hasn’t paid you in lieu of your entitlement), then you should discuss this with your employer in the first instance.
You could also share this Working Families guidance with them.
My employer does not recognise my right to take accrued holiday following maternity leave – what are my options?
You build up holiday as normal while you are on maternity leave, and your employer should recognise this. It is a well known principle of UK employment law.
If you can’t take your holiday because you’re on maternity leave, your employer should let you carry over up to 5.6 weeks of unused days (pro rata – this is the equivalent of 28 days if you work 5 days a week) into your next holiday year. This principle has recently been confirmed by the holiday pay and entitlement reforms which came into force on 1 January 2024.
Your employer should allow you to take your accrued holiday when returning from maternity. This could be straight after your maternity leave or at another time in the year or you could spread out your accrued holiday over the course of the holiday year, however you are entitled to use your accrued holiday.
Alternatively, some employers operate rolled-up holiday pay and if your employer does this they may choose to make a payment in lieu of your accrued holiday pay to you instead of allowing you to take the leave. (As noted above, this practice is unlawful, but some employers still operate it and if you have received payment in lieu it is unlikely to be worthwhile challenging that.
Raise a grievance
If the discussions with your employer don’t resolve the issue, or you think your employer has treated you very unfairly, and the relationship is at risk or is breaking down, you can consider raising a grievance.
Raising a grievance is important if you think you might later raise a claim in the Employment Tribunal because failure to follow internal resolution methods can disadvantage your claim.
It is often advisable to try and resolve things amicably, as formal processes can damage your relationship with your employer. For legal insight into grievances and tips on how to engage with your employer before it reaches this point, see our article on how grievances do more harm than good.
Make a claim in the Employment Tribunal
If your employer still does not recognise your right to take your accrued holiday (and has not paid you in lieu) despite you having raised this informally and/or as a grievance, then you can consider a claim against your employer in the employment tribunal.
If you want to submit an Employment Tribunal claim, there is a strict time limitation to do so – you must bring a claim within three months less a day of the date your change occurred (for breach of contract), the date of your dismissal (for unfair dismissal), or the date of the acts complained of (for discrimination).
In order to start the process of making a claim, you must first contact ACAS to start early conciliation. For further details of the process for bringing an Employment Tribunal claim please see our articles on starting a claim.
The process can be complex, so we strongly recommend seeking legal advice if you choose to do this.
You may have the following potential claims:
- A claim for unpaid or underpaid holiday pay under Regulations 16 and 30 of the Working Time Regulations 1998 – This is relevant where you have taken your accrued holiday but your employer did not pay you for it. You could also claim unlawful deduction from wages.
- A claim that your employer has refused to let you take your accrued statutory leave under Regulations 13, 13A and 30 of the Working Time Regulations 1998 – This is relevant where you have been unable to take the holiday you have accrued during maternity leave because your employer refuses to recognise it;
- A claim for Sex Discrimination – If your employer has not recognised your right to accrue holiday during your maternity leave then you may have a claim for indirect sex discrimination.
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.
This probably isn’t what you came here for.
You’re looking for answers – maybe even a lifeline. And we’re proud to be able to offer free legal advice to parents and carers who need it.
But keeping this service free, expert, and up to date takes time, people, and funding.
- We’re a small charity, not a big law firm. That means we can focus on helping parents and carers, not chasing fees.
- It also means we’re free to speak up, using what we learn to campaign for fairer workplace rights for all families.
- And it means we can keep our advice free and accessible for those who need it most, not hidden behind a paywall or limited to those who can afford a solicitor.
Most people who visit our site won’t donate – and that’s okay. But if you’re in a position to chip in, we’d be hugely grateful. Your support helps us keep showing up for families when it matters most.
Whatever you can give – thank you.
You’re helping build a fairer future for working families.
We would love your feedback
Would your employer benefit from support from Working Families?
Would your employer benefit from some support & guidance from Working Families? If you would like to make your employer aware of how Working Families can help them, we have an introduction letter template available that you can give to the relevant person in your organisation.
The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.
We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.