Shift workers with genuinely variable hours build up statutory holiday at 12.07% of the hours they actually work in each pay period — a rate derived from dividing the 5.6-week statutory minimum by the 46.4 weeks left in the year once that leave is taken out. This method was reinstated for leave years starting on or after 1 April 2024, and it only applies to workers who meet the legal definition of “irregular hours” or “part-year” — not to every rota-based employee. Getting the classification and the sums right matters, because entitlement (how much leave someone is owed) is a different question from holiday pay (how much they’re paid for it), and mixing the two up is where most shift-scheduling employers go wrong.
Key Takeaways
- Not every shift worker is an “irregular hours worker” in law — the 12.07% method only applies if a worker’s contracted hours genuinely vary pay period to pay period.
- 12.07% comes from 5.6 weeks of statutory leave divided by 46.4 working weeks (5.6 ÷ 46.4 = 0.1207).
- Entitlement accrues on the last day of each pay period, rounded to the nearest hour (30+ minutes rounds up).
- Shift workers on a fixed rotating pattern (e.g. 4-on-4-off) still get the standard 5.6-week entitlement calculated in weeks, not the 12.07% method.
- Rolled-up holiday pay is now lawful for eligible irregular hours and part-year workers, paid as a separate, itemised uplift on every payslip.
Who Counts as a Shift Worker Under the 2024 Reform
The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 introduced two statutory categories that determine which calculation method applies. Understanding which one your shift workers fall into is the first step — and it’s the step most payroll teams skip.
An irregular hours worker is someone whose contract says their hours in each pay period are “wholly or mostly variable.” Zero-hours staff, bank workers, and casual shift cover fit this definition cleanly.
A part-year worker is someone whose contract has periods of at least a week, in some parts of the year, where they’re not required to work and aren’t paid — think seasonal hospitality or education support staff who work term-time shifts only.
Here’s the distinction that trips employers up: a shift worker on a fixed, predictable rotating pattern is neither of these. Someone working a set 4-on-4-off pattern, or a published 6-week rolling rota with the same total contracted hours each cycle, has regular hours even though the days and times move around. That worker is entitled to the standard 5.6 weeks calculated in weeks (or converted to an average day), not the 12.07% accrual method. Confusing “variable shift pattern” with “variable hours” is one of the most common compliance errors in shift-based industries — for the full statutory framework, see our complete guide to UK annual leave entitlement.
The 12.07% Calculation, With a Worked Example
For workers who do meet the irregular hours or part-year definition, entitlement is built up at the end of each pay period using this formula:
Holiday entitlement (hours) = Hours worked in the pay period × 12.07%Worked example: Priya works irregular shifts at a care home, picking up cover shifts booked through a rota app. Her contract confirms her hours vary pay period to pay period, so she’s an irregular hours worker.
- In August, Priya works 96 hours across a mix of day and night shifts.
- Holiday accrued: 96 × 0.1207 = 11.59 hours.
- Rounded under the 30-minutes-or-more rule: 12 hours of statutory holiday.
If Priya then has a quieter month and only works 40 hours, she accrues 40 × 0.1207 = 4.83 hours, rounded down to 5 hours. Because accrual tracks actual hours worked, her balance moves with her rota rather than sitting at a fixed monthly figure — which is exactly why manual spreadsheet tracking becomes error-prone once you have more than a handful of shift workers on this method. Our UK holiday entitlement calculator runs this calculation automatically, including the rounding step.
It’s worth noting this method caps out at the statutory maximum: even a worker on very high hours can’t accrue more than the 5.6-week equivalent in a year.
Rolled-Up Holiday Pay: The Basics
Once you know how much leave a shift worker has built up, the separate question is how they get paid for it. Since 1 April 2024, employers can use rolled-up holiday pay for eligible irregular hours and part-year workers — paying an additional 12.07% on top of every payslip, shown as its own line item, rather than paying holiday pay only when leave is actually taken.
Two things employers get wrong here:
- Rolled-up pay is only lawful for workers who meet the irregular hours or part-year definitions above — you cannot apply it to a fixed-pattern shift worker.
- Paying the uplift does not remove the duty to let workers actually take time off. Rolled-up pay covers the payment; it doesn’t substitute for rest.
This article focuses on entitlement — the hours or days a shift worker is owed. For the payment mechanics, including how to calculate rolled-up pay and average weekly earnings for workers with fluctuating pay, see our dedicated guides on holiday pay for irregular hours workers and holiday pay calculations after Harpur Trust v Brazel.
Common Mistakes Employers Make
- Applying 12.07% to everyone on a rota. Fixed-pattern shift workers with regular contracted hours should get the standard weeks-based entitlement, not accrual.
- Forgetting zero-hours workers accrue holiday at all. Casual and zero-hours shift staff are workers under UK law and accrue statutory leave from day one — see our zero-hours contract holiday guide for how this plays out in practice.
- Rounding inconsistently. The rule is simple (round down under 30 minutes, round up at 30 or more) but easy to apply differently month to month without a system enforcing it.
- Losing track of entitlement across multiple short-term contracts. Shift workers who move between departments or take breaks in bookings need their accrual carried forward accurately, not reset.
- Treating rolled-up pay as optional record-keeping. The uplift must be itemised separately on the payslip; folding it invisibly into an hourly rate isn’t compliant.
FAQ
Do all shift workers get the 12.07% holiday method?
No. Only workers who meet the legal definition of an irregular hours worker or a part-year worker use the 12.07% accrual method. A shift worker on a fixed, predictable rotating pattern with the same contracted hours each cycle gets the standard 5.6-week entitlement instead.
How is 12.07% worked out?
It comes from dividing the 5.6 weeks of statutory annual leave by the 46.4 remaining working weeks in a standard year (5.6 ÷ 46.4 = 0.1207, or 12.07%). Multiply a worker’s hours for the pay period by this rate to get their accrued holiday in hours.
What pay period should I use for the calculation?
Use whatever pay period the worker is actually paid on — weekly, fortnightly, or monthly. Accrual is calculated on the final day of each pay period based on the hours worked within it.
Can I still use 12.07% for a worker with occasional overtime but otherwise fixed hours?
Generally no. If the worker’s core contracted hours are fixed and only overtime varies, they’re likely not an irregular hours worker for this purpose. Assess the contract terms carefully, since misclassification can lead to under- or over-accrual.
Does holiday still accrue when a shift worker isn’t scheduled any hours?
Under the 12.07% method, accrual is based on hours actually worked in the pay period. A pay period with zero hours worked won’t generate accrual for that period, but any leave already built up isn’t lost.
Sources: GOV.UK, Holiday entitlement, Acas, Building up holiday for irregular hours and part-year workers, Acas, Calculating holiday pay.