How do I calculate holiday pay in 2026?
For regular hours workers, holiday pay is a week's normal pay per week of leave. For irregular hours and part-year workers, the law changed in January 2024 — you can now use rolled-up holiday pay at 12.07% of pay, or calculate using a 52-week reference period.
Full answer
Holiday pay calculation has been a source of confusion and tribunal claims for years. Here's the current position:
For workers with regular hours: Holiday pay = a week's normal pay for each week of statutory leave (5.6 weeks per year). Normal pay includes regular overtime, commission, and certain allowances — not just basic salary. The Supreme Court (Harpur Trust v Brazel, 2022) confirmed this.
For irregular hours and part-year workers (changed January 2024): The government changed the rules following Harpur Trust. You now have two options:
Option 1: Rolled-up holiday pay — Pay an additional 12.07% on top of each pay packet as holiday pay. Workers don't get paid when they're on leave, but have already received their holiday pay throughout the year. This is now lawful for irregular and part-year workers (it was previously unlawful).
Option 2: 52-week reference period — Calculate average weekly pay over the previous 52 weeks (excluding weeks with no pay). The resulting average is the rate for each week of leave.
- Guaranteed overtime
- Regular voluntary overtime (Flowers v East of England Ambulance)
- Commission (Lock v British Gas)
- Certain allowances regularly received
- Only paying basic rate for holiday
- Forgetting to include regular overtime
- Not excluding no-pay weeks from the reference period
- Rolling up holiday pay for workers with regular hours (still unlawful for these workers)
Public holidays: Workers have no automatic right to paid public holidays — it depends on their contract.
Get compliance answers specific to your business
Alice monitors your sector, alerts you to changes, and answers your questions — inside ComplianceAlert.
Related questions
What are the rules for zero-hours contracts in 2026?
The Employment Rights Bill introduces significant new rights for zero-hours workers, including the right to request guaranteed hours after 12 weeks and the right to reasonable notice of shifts. These changes are being phased in from 2026.
Is SSP from day one now?
Not yet — but it's coming. The Employment Rights Bill proposes removing the three waiting days for Statutory Sick Pay, meaning SSP would be payable from the first day of sickness. The change is expected to come into force in 2026.
What are my obligations when cancelling a zero-hours shift?
Currently there is no statutory minimum notice period for cancelling a zero-hours shift, but the Employment Rights Bill will change this. Once in force, employers must give reasonable notice — and compensation will be owed if shifts are cancelled late.