A zero-hours contract means no guaranteed hours, which leads a lot of workers to assume it means no paid holiday either. That assumption is wrong, and it is worth clearing up early, because it affects real money at the end of every pay period.

This guide walks through what zero-hour contract holiday pay actually looks like in the UK, how the 12.07 percent accrual rule works, when rolled-up holiday pay is allowed, and what changes are already locked in for 2026 and 2027 under the Employment Rights Act 2025.

What Is a Zero-Hour Contract?

A zero-hour contract is also called a casual contract. Some people write it as a 0-hour contract. The employer does not have to offer work, and the worker does not have to accept it.

GOV.UK describes it as work that is on call or piece work, with interpreters as a common example. Hospitality, care, retail, and warehousing all use these contracts widely.

Three points are fixed in law:

• Workers can take work elsewhere. A clause banning this is unenforceable.
• Workers get the National Minimum Wage.
• Workers get statutory annual leave on the same basis as regular staff.

Most zero-hours workers have worker status. Some are employees. Both groups get paid holiday, though employee status matters more for rights such as sick pay and unfair dismissal.

Do You Get Holiday Pay on a Zero-Hour Contract in the UK?

Yes. Holiday pay and zero-hours contracts go together by law. GOV.UK and Acas both confirm that zero-hours workers have the right to statutory annual leave, under the Working Time Regulations 1998.

Key facts:

• Holiday builds up from the first day of work.
• It builds up during probation, sick leave, and statutory leave.
• A contract cannot remove or cut the entitlement.
• Self-employed people are usually not covered, so status matters and is worth checking.

Watch out: a worker with long gaps between shifts still keeps the holiday already built up. A quiet month does not wipe it out.

Zero-Hours Contract Holiday Entitlement UK

The statutory minimum is 5.6 weeks a year. For a five-day week, that works out at 28 days, and nobody can claim more than 28 days under the statutory minimum, however many days they actually work.

Zero-hours workers have no fixed week, so the law uses hours instead of days.

The 12.07 Percent Rule

Irregular hours workers build up holiday at 12.07 percent of hours worked in each pay period, accruing it on the last day of that period.

The figure is not random. It comes from 5.6 weeks divided by the 46.4 weeks left after holiday is taken. Each hour worked earns about 7.2 minutes of paid leave.

Acas says part hours under 30 minutes round down, and part hours of 30 minutes or more round up. If the contract gives more than the statutory minimum, the employer must adjust the percentage accordingly.

Who Counts as an Irregular Hours or Part-Year Worker?

These definitions began on 1 April 2024.

Agency workers can fall into either group, depending on their working pattern. Our guide to full-time vs part-time hours is worth a look if you are trying to work out where a mixed contract sits.

Holiday Pay for Zero-Hours Workers

Entitlement and pay are different things. Zero-hours contract holiday pay is what you receive while on leave. Entitlement is how much leave you can take. Holiday pay is what you are actually paid while you take it.

Acas says a worker on holiday should be paid the same as when working. Three working patterns exist:

What Holiday Pay Must Include

By law, holiday pay for at least four weeks must include:

• Commission linked to contract tasks.
• Payments linked to status, such as seniority.
• Regular overtime paid in the last year.

Employers may include these in the full 5.6 weeks, though they do not have to. If overtime is a regular part of how your hours build up, our guide to when regular overtime becomes contractual explains how that status can affect pay beyond holiday too.

Taking Holiday Before It Is Built Up

In the first year, a worker may take holiday before it accrues, if the employer agrees. Employers can also let workers use holiday early in the final pay period of a leave year.

Calculate Holiday Pay for Zero-Hour Contracts in the UK

This is the holiday pay calculation UK employers and workers search for most. Follow these steps.

Step 1: Find the hours worked. Add up hours worked in the pay period, using payroll or clock-in data. Most zero-hours holiday pay UK errors start with guessed hours rather than recorded ones.

Step 2: Work out holiday earned. Multiply hours by 12.07 percent, then round using the Acas rule above.

Step 3: Find the average hourly rate. Look at the 52 weeks before the holiday and divide total pay by total hours. Acas says to include any holiday pay in that window for irregular hours workers. A week usually runs Sunday to Saturday.

Step 4: Multiply. Holiday hours multiplied by the average hourly rate gives the holiday pay.

Worked example: Rita works 86 hours in June. Her average hourly rate is 13.00 pounds. Holiday earned: 86 multiplied by 12.07 percent equals 10.38 hours, rounded to 10 hours. Holiday pay: 10 multiplied by 13.00 pounds equals 130.00 pounds.

Updated for 2026: some older guides still use a 12-week average. That rule ended in April 2020, and Acas now uses 52 weeks.

Check before you rely on it: some law firm guides say unpaid weeks are skipped, with a look-back of up to 104 weeks. The Acas page for irregular hours workers does not say this. Use the GOV.UK holiday calculator or call the Acas helpline if your pattern has long gaps.

Rolled-Up Holiday Pay UK

Rolled-up holiday pay UK employers use adds holiday pay to each pay packet. It replaces separate pay when leave is taken.

The law is clear after the 2024 reforms. Acas says employers may use it only for irregular hours and part-year workers. Before that, the Supreme Court decision in Harpur Trust v Brazel (2022) had made the position uncertain for part-year workers.

The Three Conditions

Worked example: Tom earns 850 pounds in a pay period. His employer uses rolled-up pay. 12.07 percent of 850 pounds is 102.60 pounds. The payslip shows 850.00 pounds pay and 102.60 pounds holiday pay as separate lines. Tom receives no extra pay when he takes a week off, because it has already been paid along the way.

Rolled-Up Pay Versus Pay When Leave Is Taken

Duties that remain: employers must still make sure workers can take their leave, and must encourage them to take it. They should consult workers and unions before introducing rolled-up pay, and a contract change may be needed before it starts.

Workers off sick or on statutory leave must still be paid holiday pay. The amount is the average per pay period over the previous 52 weeks, or fewer weeks if rolled-up pay has run for less time than that.

Watch out: using rolled-up pay for a fixed-hours worker is a breach. So is hiding it inside a higher hourly rate with no breakdown shown.

Zero-Hours Holiday Pay Rules: Leave, Carry-Over, and Leaving

These zero-hours holiday pay rules apply to most workers.

Taking leave. Employers can refuse a request for business reasons, but they must give proper notice and a fair chance to take leave.

Carry-over. Holiday normally must be used in the leave year. Carry-over is allowed in set cases, such as sickness, family leave, or where the employer did not let the worker take leave. Employers should plan how to handle holiday accrued in the final pay period.

Leaving. Accrued, untaken statutory holiday must be paid on termination, as payment in lieu.

Records. From 6 April 2026, employers must keep records of annual leave and holiday pay for at least six years. This includes carried-over holiday.

Zero-Hours Contract Employment Rights

Beyond paid leave, zero-hours contract employment rights include:

Break entitlement sits alongside these rights too. If your shifts regularly run long, our guide to how many days you can legally work in a row covers the rest rules that apply whatever your contract type.

The 2026 Sick Pay Change

Statutory Sick Pay now pays the lower of 123.25 pounds a week or 80 percent of average weekly earnings. This brings many low-paid and casual employees into scope for the first time, since the old lower earnings limit has been removed. Check GOV.UK for your status.

Zero-Hours Contract Paid Leave Beyond Holiday

Zero-hours contract paid leave is not limited to annual leave. Employees and workers may also qualify for statutory family leave and pay, depending on status and earnings. Acas notes that irregular hours workers must not lose holiday pay while on statutory leave. These include maternity, paternity, adoption, shared parental, neonatal care, parental bereavement, and carer leave.

What Changes Next: The Employment Rights Act 2025

The Employment Rights Act 2025 became law on 18 December 2025. Some older guides still call it a Bill. The changes are being phased in rather than landing all at once.

What Guaranteed Hours Means

Qualifying zero-hours and low-hours workers will get a right to be offered a contract that reflects the hours they usually work. The government has consulted on the low hours threshold, with a stated preference for somewhere between 8 and 20 hours a week. Workers can decline and stay on flexible terms, and they must be offered again in later reference periods rather than just once.

This is not an outright ban on zero-hours contracts. Dates are still to be confirmed through secondary legislation, so check Acas for the latest position before relying on a specific date.

Fair Work Agency and Holiday Pay

The Fair Work Agency plans to enforce statutory holiday pay from 2027, not before April that year. Proposed powers include penalties of up to 200 percent of an underpayment per worker, capped at 20,000 pounds per worker, with the penalty halved if the employer pays within 14 days of the notice. A consultation on how this will work closed on 22 September 2026, so the final rules may still shift before enforcement begins.

Common Mistakes

Employer Checklist

• Check each worker meets the irregular hours or part-year definition.
• Choose a method: pay when taken, or rolled-up pay.
• Update contracts if you introduce rolled-up pay.
• Record hours worked in every pay period.
• Show rolled-up pay as a separate payslip line.
• Track accrued and used holiday per worker.
• Encourage leave and plan the final pay period of the leave year.
• Pay accrued holiday when the work ends.
• Keep leave and pay records for six years.
• Review your process before holiday pay enforcement starts in 2027.

Tracking hours and holiday accrual by hand across a casual team is where most of these mistakes creep in. Our guide to work rota law in the UK covers the wider scheduling rules worth building into the same process.

What to Do If Your Holiday Pay Is Wrong

Check your contract and payslips. Look for the method used and any rolled-up line.

Do the sum. Use the 12.07 percent figure and your average hourly rate.

Ask your employer. Raise it in writing and keep a copy.

Call the Acas helpline. Early conciliation is required before most tribunal claims.

Watch the deadline. For events on or after 1 October 2026, the usual limit is six months minus one day. Earlier events usually keep the three months minus one day limit. A series of underpayments can be judged from the last one in the series.

Final Thoughts

Zero-hour contracts offer flexibility, but they do not remove paid leave. Workers earn holiday from the first shift, and employers must calculate it correctly, record it for six years, and keep an eye on what 2027 brings.

Get the basics right. Use actual hours. Use the 12.07 percent figure. Use a 52-week average. Show rolled-up pay on its own payslip line. Get those four things consistently right, and you are covered for today and ready for what comes next.

How Smart Workforce Supports Zero-Hours Holiday Compliance

Tracking accrued holiday, average hourly rates, and rolled-up pay across a casual workforce is hard to do reliably on a spreadsheet. Smart Workforce tracks hours worked in real time, calculates 12.07 percent accrual automatically, flags the 52-week average for holiday pay, and keeps audit-ready records ready for the six-year retention duty and the Fair Work Agency.

Discover how Smart Workforce simplifies zero-hours holiday pay. Book a demo today.