Rolled-up holiday pay explained
The 12.07% uplift on every payslip: who it's lawful for, the two rules that make it compliant, and why it was banned for eighteen years.
Rolled-up holiday pay is lawful only for irregular-hours and part-year workers, for leave years starting on or after 1 April 2024 - paid as a separate, itemised 12.07% line on every payslip. For everyone else it remains non-compliant: holiday pay must be paid when the leave is actually taken.
What is rolled-up holiday pay?
Instead of paying someone their normal wage while they're on holiday, you add an uplift to every payslip - 12.07% of the pay for hours worked - so their holiday entitlement is paid as they earn it. When they take time off, they take it unpaid, because the money already arrived.
The 12.07% is the statutory ratio: 5.6 weeks of leave divided by the 46.4 weeks actually worked in a year.
Who can be paid rolled-up holiday pay?
| Worker | Rolled-up allowed? |
|---|---|
| Irregular hours (zero-hours, casual) | Yes - leave years from 1 Apr 2024 |
| Part-year (term-time only) | Yes - leave years from 1 Apr 2024 |
| Fixed part-time (e.g. 3 days a week) | No - pay when leave is taken |
| Full-time salaried | No - pay when leave is taken |
Get the category wrong and you have two problems at once: unpaid holiday pay, and a worker who has effectively had no paid leave. Acas sets out the definitions of irregular-hours and part-year workers.
A worked example
- Holiday pay uplift: £1,200 × 12.07% = £144.84
- Payslip shows two lines: Basic pay £1,200.00 and Holiday pay £144.84
- Total gross: £1,344.84
Our 12.07% holiday pay calculator does this per pay period, and the term-time calculator handles the school-year version.
What are the two hard rules?
- Itemise it. The 12.07% must appear as its own line on the payslip. Rolled into the hourly rate and hidden, it doesn't count as holiday pay at all - the classic reason employers end up paying twice.
- They must still be able to take the leave. Rolled-up pay changes when holiday is paid, not whether it exists. Workers still accrue 5.6 weeks' worth of time and must be able to take it - unpaid, since the pay came earlier. Discouraging people from taking it defeats the purpose and the protection.
Why was rolled-up holiday pay banned before?
The European Court held in 2006 that rolling up holiday pay discouraged workers from actually resting - the whole point of the Working Time Directive. UK practice followed: pay holiday when it's taken. That stayed the position for nearly two decades.
Then came Harpur Trust v Brazel (Supreme Court, 2022), which gave part-year workers on permanent contracts the full 5.6 weeks regardless of how few weeks they worked - producing the odd result that a term-time music teacher accrued proportionally more leave than a full-time colleague. The 2024 Working Time reforms answered both problems at once: proportional 12.07% accrual for irregular-hours and part-year workers, and rolled-up pay made lawful for that same group.
What about everyone else's holiday pay?
Pay it when the leave is taken, at normal pay. Where pay varies (commission, regular overtime, shift premia), use an average of the last 52 paid weeks. Regular overtime belongs in that average - see is overtime pay legally required? for how overtime feeds holiday pay, and UK annual leave explained for the 5.6-week foundation.
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Casual hours, correct holiday
CoDash tracks accrual for irregular-hours and part-year staff automatically - and shows everyone what they've actually got left.