Holiday pay and rolled-up holiday pay
Irregular-hours and part-year workers accrue statutory holiday at 12.07% of hours worked, and rolled-up holiday pay, an uplift added to every payslip, is lawful for these workers. Since April 2026 employers must also keep six years of holiday records, and failing to do so is a criminal offence. A consultation on how the Fair Work Agency will police holiday pay closed on 22 September 2026.
Employers have had their say on holiday pay
What happened
The government asked employers how a new body, the Fair Work Agency, should check holiday pay. That consultation closed on 22 September 2026. The government is now reading the replies. It has not said what it will do yet.
What it means for you
Nothing changes in the law today. The 12.07% rule and rolled-up holiday pay stay the same. Keep your holiday records for six years, because that is already the law and checks are coming.
Dates to know
- 22 September 2026The consultation closed.
- 6 April 2026Keep your holiday records for six years. That is already the law.
Source: GOV.UK, Department for Business and Trade. We check this page every week. Last checked .
For leave years beginning on or after 1 April 2024, irregular-hours and part-year workers accrue statutory holiday at 12.07% of the hours they actually work in each pay period, capped at 28 days a year. This restored a simpler calculation method after the Harpur Trust case had disrupted the previous approach. The same reform made rolled-up holiday pay lawful again, but only for these worker categories: instead of paying holiday pay when leave is taken, the employer adds a 12.07% uplift to every payslip, itemised as a separate line. It's an optional alternative, not compulsory. From 6 April 2026, a new duty under section 35 of the Employment Rights Act 2025 requires employers to keep records of each worker's holiday entitlement, leave taken, and how holiday pay was calculated, for six years. Failing to keep adequate records is now a criminal offence, layered on top of the 12.07% and rolled-up pay rules rather than changing them.
Who does the 12.07% method apply to?
Irregular-hours and part-year workers, for leave years starting on or after 1 April 2024. It calculates holiday accrual as 12.07% of hours actually worked in each pay period, capped at 28 days a year.
Is rolled-up holiday pay lawful?
Yes, but only for irregular-hours and part-year workers, and only for leave years from 1 April 2024. It means paying a 12.07% holiday-pay uplift with every payslip instead of paying when leave is taken, and it must be shown as a separate, itemised line.
What's new from April 2026?
A duty to keep six years of holiday records, covering entitlement, leave taken and how pay was calculated. It's a compliance and evidencing obligation, not a change to the underlying 12.07% or rolled-up pay rules, but failing to keep records is now a criminal offence.
Who will enforce holiday pay in future?
The Fair Work Agency, established on 7 April 2026, is expected to take on holiday pay enforcement. A Department for Business and Trade consultation on how that will work ran from 30 June 2026 and closed on 22 September 2026; the government is analysing the responses and has not published its conclusions. Nothing has changed in the law yet: the consultation is about the enforcement framework, not the 12.07% accrual rule or rolled-up holiday pay.
UK holiday pay, calculated by Teamed
- Accrual for irregular-hours workers
- Rolled-up pay where allowed
- Six-year records kept
Key figures
| Detail | Value |
|---|---|
| 12.07% accrual method for irregular-hours/part-year workers | For leave years beginning on or after 1 April 2024, these workers accrue statutory holiday at 12.07% of actual hours worked in each pay period (capped at 28 days total), replacing the calendar-week-based method the Harpur Trust v Brazel ruling had disrupted. (source) |
| Rolled-up holiday pay made lawful again | Rolled-up holiday pay is lawful, but only for irregular-hours and part-year workers, and only for leave years beginning on or after 1 April 2024. It remains an optional alternative method, not compulsory. (source) |
| Rolled-up holiday pay calculation method | Rolled-up holiday pay equals 12.07% of the worker's total pay in the relevant pay period, and must be itemised as a separate line on the payslip. (source) |
| Legal basis | Working Time Regulations 1998 (SI 1998/1833), regulations 15B and 16, as inserted/amended by the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426). (source) |
| New holiday record-keeping duty from 6 April 2026 | Regulation 16B of the Working Time Regulations 1998, inserted by section 35 of the Employment Rights Act 2025 and in force from 6 April 2026 (commenced by SI 2026/323), requires employers to keep records adequate to show compliance with the annual leave entitlements and to retain them for six years from the date they were made. Regulation 29 makes failure to comply an offence, punishable by a fine. (source) |
Frequently asked questions
Can I pay holiday pay rolled up into an employee's hourly rate?
Only for irregular-hours and part-year workers, and only as a clearly itemised separate line on the payslip, not silently folded into the hourly rate.
What happens if I don't keep holiday records?
Since April 2026, failing to keep adequate holiday records for six years is a criminal offence under the Working Time Regulations as amended by the Employment Rights Act 2025.
Does the 12.07% method apply to all employees?
No, only to irregular-hours and part-year workers. Regular full-time and part-time employees with fixed hours use the standard statutory holiday calculation.
UK employment law is moving fast, and commencement dates have slipped before. When Teamed is your legal employer, we track every change and update your contracts, policies and payroll as the law lands, so you never have to read a roadmap to stay compliant.
