How do you calculate holiday pay for zero-hours staff? For leave years starting on or after 1st April 2024, workers with irregular hours accrue holiday at 12.07% of the hours they actually work in each pay period, and you can either pay it when they take leave or pay rolled-up holiday pay as a 12.07% uplift on every payslip. The law is clearer than it used to be. The claims now come from cafes that still are not applying it.
Who counts as irregular hours
Anyone whose paid hours in each pay period are wholly or mostly variable under their contract: classic zero-hours baristas, casual weekend staff, and most flexible rota arrangements. Part-year workers (term-time only, seasonal) are covered by the same regime. Staff on fixed contracted hours are not; they keep the standard 5.6 weeks calculated the traditional way.
The accrual: 12.07% of hours worked
Each pay period, multiply hours worked by 12.07% and add the result to the worker’s holiday balance, capped at 28 days a year. Someone who works 60 hours in a month accrues about 7.2 hours of holiday. The figure comes from the ratio of 5.6 weeks of statutory leave to the 46.4 working weeks that remain, and it applies to worked overtime hours too, not just rostered hours.
Two lawful ways to pay it
- Pay when taken. The worker books leave and you pay their accrued hours at their average hourly rate over the previous 52 paid weeks. Accurate, but admin-heavy for a busy rota.
- Rolled-up holiday pay. Add 12.07% to each payslip as a separate, itemised line on top of all pay for the period, including overtime. This is lawful again for irregular-hours workers, and for most cafes it is the tidy option. Two rules: it must be itemised separately on the payslip, and staff should still actually take time off, so encourage unpaid rest even though the pay came early.
The mistakes that turn into claims
Paying nothing because “they’re casual” (the oldest and most expensive myth in hospitality). Calculating 12.07% on basic hours but ignoring overtime. Rolling up holiday pay but burying it in the hourly rate with no payslip line, which does not count. And ignoring accrual during sickness or family leave, which continues. Underpayments build quietly: a worker can claim a series of deductions going back up to two years, multiplied across the team.
Make it painless
Decide one method, write it into contracts and payslips, and let payroll software do the arithmetic. If you inherited a muddle, quantify the exposure before someone else does, then fix it going forward. This is one of those problems that costs £200 to prevent and five figures to defend.
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General guidance for UK employers, correct at 22nd July 2026. Not advice on a specific situation. More guides for your sector: HR for cafes and coffee shops. Not sure where your gaps are? Check your HR Risk Score in 3 minutes.
