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.
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 handles this if you hire through Teamed?
Holiday accrual, rolled-up pay calculations and the new six-year record-keeping duty are all handled inside Teamed's UK payroll: every irregular-hours worker's holiday is calculated correctly and the paper trail is kept for you automatically.
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 | Section 35 of the Employment Rights Act 2025 inserts a new regulation 16B into the Working Time Regulations 1998, requiring employers to keep records of each worker's holiday entitlement, leave taken and how holiday pay was calculated, for 6 years. Failing to do so is a criminal offence. (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.
