Guide
Irregular hours and part-year holiday entitlement: the 12.07% rule
Updated
The single biggest change to UK holiday arithmetic in a decade applies to leave years beginning on or after 1 April 2024, and it replaced a calculation that had been wrong in a Supreme Court's opinion. If your staff are casual, term-time, zero hours or seasonal, this is the rule that governs them and the multiplication above does not.
Who the rule catches
gov.uk defines an irregular hours worker in relation to a leave year as one where "the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable".
A part-year worker is one who "under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid".
Two things in those definitions do the work, and both are easy to miss. The test is applied per leave year, not once at hiring. And it turns on the terms of the contract, not on what actually happened: somebody whose contract fixes their hours does not become an irregular hours worker because a quiet quarter cut their shifts.
The calculation
Accrual is 12.07% of actual hours worked in a pay period. gov.uk gives the reason for the number rather than leaving it as a constant: 12.07% "is the proportion of statutory annual leave in relation to the working weeks of each year", which is 5.6 weeks over 46.4 weeks.
The consequence worth internalising is that entitlement here is measured in hours, not days. A worker who did 40 hours in a pay period has accrued 4.83 hours of leave in that period. Converting that to days needs a day length, and the day length is a presentational choice rather than a statutory one.
Rolled-up holiday pay
For the same group, holiday pay may be rolled up. gov.uk describes the method as "12.07% of a worker's total pay", the same proportion applied to money instead of hours.
Rolled-up pay is an option for these workers, not a default for everyone. Applying it to a regular hours worker does not become lawful because it is administratively easier.
What still applies
The 5.6 weeks ceiling has not moved, and neither has the general position that bank holidays are not a separate statutory entitlement.
Accrual during sickness and statutory leave is handled separately, on an average of hours worked over a 52 week relevant period rather than on the hours actually worked in the absent period. If your workforce includes irregular hours staff who take long sickness absences, that is the calculation to read in full before you rely on a spreadsheet.