How should holiday pay work for irregular-hours and part-year workers?

Start with the contract and working pattern. An irregular-hours worker has paid hours that are wholly or mostly variable in each pay period. A fixed rotating pattern is not automatically irregular just because one week differs from another. A part-year worker has contractual periods of at least a week when they are not required to work and are not paid, while the contract continues. These definitions matter because the special rules do not apply to every part-time employee. This answer covers Great Britain. Northern Ireland has separate employment rules. Check the actual arrangement before choosing a calculation in your payroll or holiday system.

Eligible workers normally build up statutory holiday at 12.07% of hours worked in each pay period, subject to the relevant rules and rounding. A contract offering more than statutory entitlement may require a different percentage. The holiday balance should show hours earned, hours taken and any permitted carry-forward. Keep entitlement separate from the amount paid: they answer different questions. Sickness and statutory leave can require additional calculations, so a period with no hours worked does not always mean no holiday accrues. Avoid applying a simple percentage to everyone without checking their contract, leave year and absence history first with your payroll adviser.

For qualifying workers, an employer can choose rolled-up holiday pay or pay holiday when it is taken using the applicable reference-period rules. Rolled-up pay must be an addition to normal pay, shown separately on the payslip. For statutory entitlement, £1,000 of relevant pay produces £120.70 of rolled-up holiday pay. That payment does not remove the right to take leave. Workers must still be able and encouraged to take it. Contract changes and consultation may be needed before changing methods. Special rules also apply during sickness or statutory leave. Do not bury holiday pay within an advertised hourly rate and assume the requirements are satisfied.

Your payroll and leave records should agree on the worker’s classification, contractual entitlement, hours, pay periods and method used. Record leave taken even where holiday pay has already been paid through payroll. Keep approved changes to working patterns and contracts, and check how starters, leavers and absences affect the balance. Review any existing spreadsheet or app before relying on its totals: a correct percentage applied to the wrong worker still gives the wrong result. CASS can assess the payroll calculations within an agreed service. Contract interpretation or disputed entitlement may need employment-law advice. The employer remains responsible for ensuring workers receive and take their entitlement.