How Do You Calculate Holiday Pay for Part-Time and Irregular-Hours Workers in the UK?
TimeClock 365 works with a growing number of UK employers who are still calculating holiday pay for part-time, casual, and irregular-hours staff by hand - and getting it wrong. The rules changed in 2024, and for workers whose hours or pay vary week to week, the calculation is genuinely different from the simple "one week's pay per week of leave" approach used for fixed-hours staff. Getting it wrong is not a paperwork slip; it is a National Minimum Wage-style underpayment that can be claimed back for years.
This guide covers who counts as an "irregular hours" or "part-year" worker, how the 52-week reference period works, when rolled-up holiday pay is allowed, and the mistakes that create the most exposure.
Who Counts as an Irregular-Hours or Part-Year Worker?
The 2024 reforms (which apply to leave years starting on or after 1 April 2024) created two specific legal categories:
- Irregular hours worker - someone whose paid hours in each pay period are, under the terms of their contract, "wholly or mostly variable." Zero-hours and most casual workers fall here.
- Part-year worker - someone who, under their contract, is required to work only part of the year and has periods within it of at least a week where they get no pay. Term-time-only staff and seasonal workers typically fall here.
A regular part-timer who works the same 20 hours every week for the same pay is not in either category - their holiday pay is simply based on their normal weekly pay, pro-rated for the leave taken, the same way it always has been.
The 52-Week Reference Period Method
For irregular-hours and part-year workers, holiday pay is based on average pay over the previous 52 weeks actually worked - not 52 calendar weeks. If a week had no pay at all (not sick pay, not maternity pay, just genuinely no work), it is skipped and the calculation looks back further, up to a maximum of 104 weeks, to find 52 weeks that count.
The mechanics:
- Identify the worker's total pay in each of the last 52 weeks in which they were paid something.
- Add up total pay across those 52 weeks.
- Divide by 52 to get average weekly pay.
- Multiply by the number of weeks of leave being paid (statutory minimum is 5.6 weeks a year, pro-rated for partial years).
If the worker has been employed for less than 52 weeks, use however many complete weeks of pay data exist instead.
Rolled-Up Holiday Pay: The Simpler Alternative
Since the 2024 reforms, employers can choose to pay rolled-up holiday pay to irregular-hours and part-year workers instead of running the 52-week calculation and paying separately when leave is taken. Under this method:
- Holiday pay is calculated as 12.07% of the worker's total pay in each pay period.
- It is paid alongside normal wages in every payslip, not saved up and paid out when leave is taken.
- It must be itemised separately on the payslip - lumping it into a single gross figure is not compliant.
Rolled-up holiday pay is only lawful for irregular-hours and part-year workers. Employers cannot apply it to staff with normal, regular hours - for those workers, holiday pay must still be paid out when leave is actually taken.
Why This Trips Up Payroll and HR Teams
Three patterns cause the most disputes:
Mixing up "52 weeks" with "52 calendar weeks"
The reference period is 52 weeks in which the worker was paid something. Unpaid weeks are skipped, not counted as zero. Treating every calendar week as part of the average understates pay for workers with seasonal or patchy schedules.
Applying rolled-up pay to the wrong workers
Rolled-up holiday pay is a narrow exception for irregular-hours and part-year workers only. Applying it to a regular part-timer, or failing to itemise it on the payslip, is a compliance error that can surface years later in a tribunal claim.
Not having the underlying hours and pay data to hand
Both methods depend on accurate historical pay-per-week records. Employers relying on spreadsheets or paper timesheets often cannot reconstruct 52 weeks of accurate figures when a leaver disputes their final holiday pay. Time and attendance software that logs actual hours and pay period by period - like TimeClock 365 - removes the guesswork and gives payroll a clean, auditable trail for exactly this calculation.
How TimeClock 365 Helps
TimeClock 365's PTO and leave management tools track accrual and leave balances automatically for every worker type, including irregular-hours staff, so the 52-week average has accurate underlying data behind it. Paired with the platform's HR compliance management features, employers get an audit-ready record of hours worked, leave taken, and pay periods - exactly what's needed to defend a holiday pay calculation if it's ever challenged.
Frequently Asked Questions
What is the 52-week reference period for UK holiday pay?
It is the method used to calculate holiday pay for irregular-hours and part-year workers. Employers average the worker's pay across the last 52 weeks in which they were actually paid something, skipping unpaid weeks and looking back up to 104 weeks if needed, then multiply that average by the number of weeks of leave being paid.
Can employers use rolled-up holiday pay for all part-time staff?
No. Rolled-up holiday pay - 12.07% of pay added to each payslip instead of paid separately when leave is taken - can only be used for irregular-hours workers and part-year workers. Regular part-time staff with fixed hours must still be paid holiday pay when they actually take leave.
Does rolled-up holiday pay need to be shown separately on payslips?
Yes. Where an employer uses rolled-up holiday pay, it must be itemised as a separate amount on the payslip, not folded into gross pay. Failing to itemise it is a compliance breach even if the amount paid is correct.
What happens if a worker hasn't been employed for a full 52 weeks?
The employer uses however many complete weeks of pay data are available instead of the full 52, and calculates the average from those weeks.
Do unpaid weeks count in the 52-week average?
No. Weeks in which the worker received no pay at all are excluded from the average, and the employer looks back further (up to a maximum of 104 weeks) to find 52 weeks that do count.
Is holiday pay for irregular-hours workers based on calendar weeks or hours worked?
Neither directly - it's based on pay received per week. The calculation uses total pay across 52 qualifying weeks divided by 52, not an hourly rate multiplied by hours, which is why accurate weekly pay records matter more than hour counts alone.
This article is general information for UK employers and does not constitute legal advice. Holiday pay calculations can be affected by individual contract terms and case-specific facts. For guidance on a specific situation, contact Acas or a qualified employment solicitor.