All UK workers are legally entitled to 5.6 weeks' paid annual leave (28 days maximum for full-time workers), but major reforms that took effect in April 2024 have fundamentally changed how holiday is calculated for millions of irregular hours and part-year workers, reversing a controversial Supreme Court ruling and reintroducing rolled-up holiday pay after nearly two decades.

The new regulations address longstanding confusion around holiday calculations while maintaining the UK's two-tier system: four weeks at "normal" pay (including overtime and commission) and an additional 1.6 weeks that can be paid at basic rate. Bank holidays remain at the employer's discretion - they can be included within the 28-day minimum or offered as additional days. This flexibility, combined with the new calculation methods, gives employers more options while ensuring all workers receive their statutory minimum proportionate to hours worked.

Current minimum entitlements shape workforce planning across sectors

Every worker in the UK, regardless of employment type, receives the same fundamental entitlement of 5.6 weeks' annual leave, calculated proportionally to their working pattern. Full-time employees working five days per week receive 28 days, while part-time workers get a pro-rata amount - for example, someone working three days weekly receives 16.8 days (3 × 5.6). The entitlement is capped at 28 days even for those working six or seven days per week.

Holiday begins accruing from the first day of employment, with workers earning 1/12th of their annual entitlement each month during their first year. Employers cannot round down partial days; during the first year, they must round up to the nearest half day. After the first year, workers receive their full entitlement at the start of each leave year. While the statutory minimum sets the floor, UK employers on average provide 33.5 days including bank holidays, exceeding the minimum by 5.5 days.

The relationship between bank holidays and statutory leave remains one of the most misunderstood aspects of UK employment law. Workers have no automatic right to paid time off on bank holidays - this depends entirely on the employment contract. England and Wales observe eight bank holidays annually, Scotland nine, and Northern Ireland ten. Employers can include these within the 28-day minimum or offer them as additional leave, but part-time workers must receive bank holidays on a pro-rata basis if full-time colleagues receive them.

New classifications transform holiday calculations for variable workers

The April 2024 reforms introduced precise definitions that fundamentally alter how millions of workers' holidays are calculated. Irregular hours workers are those whose paid hours in each pay period are "wholly or mostly variable," including zero-hours contracts, bank staff, and casual workers. Part-year workers are employed year-round but only required to work certain periods, with unpaid gaps of at least one week - typically term-time workers in education.

These workers now accrue holiday at 12.07% of hours worked in each pay period, a calculation derived from dividing the 5.6 weeks' entitlement by the 46.4 working weeks in a year. This reverses the Supreme Court's 2022 Harpur Trust v Brazel ruling, which had entitled part-year workers to the full 5.6 weeks regardless of hours worked, creating an anomaly where they received more holiday than part-time colleagues working year-round.

For the first time since 2006, employers can now use rolled-up holiday pay for these workers, adding 12.07% to each payslip as a separate, clearly identified payment. Workers still take time off but receive their holiday pay in advance with their regular wages. This option only applies to irregular hours and part-year workers whose leave years begin on or after 1 April 2024, requiring updated contracts and payroll systems that can itemize the payment separately.

Holiday pay calculations now include overtime and commission

Since January 2024, holiday pay for the first four weeks must reflect "normal remuneration," not just basic salary. This includes regular overtime worked in the previous 52 weeks, commission payments intrinsically linked to work tasks, and professional status payments based on seniority or qualifications. The remaining 1.6 weeks can still be paid at basic rate, maintaining the UK's distinctive two-tier approach inherited from EU law.

Calculating holiday pay for workers with variable earnings requires a 52-week reference period, excluding any weeks with no pay. If someone earns £30,000 annually including £10,000 in regular commission, their weekly average is £576.92, making their first four weeks of holiday worth £2,307.68, with the remaining 1.6 weeks calculated at basic rate. For workers with insufficient history, employers use available data, potentially extending the reference period to 104 weeks to capture 52 working weeks.

Shift workers and those on compressed hours require careful calculation to ensure fairness. Someone working four 10-hour days weekly (40 hours total) receives 22.4 days' leave, equivalent to 224 hours - the same as a traditional full-time worker. The calculation method depends on the working pattern: use days for regular schedules but hours for variable shifts or compressed weeks. Bank holidays for these workers are best calculated in hours to avoid confusion - a 40-hour week worker would receive 64 hours for eight bank holidays compared to 60 hours for someone working 37.5 hours.

Enhanced carry-over rights protect workers during life changes

The 2024 reforms strengthened protections for workers unable to take holiday due to circumstances beyond their control. Workers on long-term sick leave can now carry over up to 20 days (or 28 days for irregular/part-year workers) to be used within 18 months of return. Those on maternity or family leave can carry forward their entire 28-day entitlement. Critically, if employers fail to encourage workers to take leave or don't inform them about "use it or lose it" policies, holiday automatically carries over.

Standard carry-over remains limited to eight days (1.6 weeks) of the statutory entitlement, requiring employer agreement. Any additional contractual holiday beyond the 28-day minimum follows contract terms, potentially allowing different carry-over arrangements. During the first year of employment, employers can allow workers to take holiday before it's fully accrued, though this requires explicit agreement and careful tracking to prevent workers going into negative balances.

Holiday continues accruing during sick leave, maternity leave, and other statutory absences, calculated using the worker's normal pattern. For irregular workers, this requires complex averaging calculations, potentially looking back 104 weeks to establish typical working patterns. The regulations ensure workers aren't penalized for taking family leave or recovering from illness, reflecting broader employment protection principles.

Practical calculation methods vary by worker type and pattern

The government provides an official calculator at GOV.UK that handles most standard scenarios, while ACAS offers free guidance through its helpline (0300 123 1100). For straightforward cases, the formula remains simple: days worked per week multiplied by 5.6. A part-time employee working three days weekly receives 16.8 days annually, which employers typically round to 17 days.

Irregular hours workers require more complex tracking. Someone working 70 hours in June accrues 8.449 hours of holiday (70 × 12.07%), rounded to 8 hours since the fraction falls below 30 minutes. Employers must track hours worked each pay period, calculate the accrual, and either hold it for when holiday is taken or pay it as rolled-up holiday pay. The choice between traditional accrual and rolled-up payment often depends on administrative preference and worker needs.

Common calculation errors include rounding down entitlement (illegal), forgetting the 28-day cap for six or seven-day workers, excluding regular overtime from holiday pay, and using incorrect reference periods. Employers must also ensure part-time workers receive pro-rata bank holidays and avoid double-counting bank holidays within statutory entitlement. Professional payroll systems reduce errors, but understanding the principles remains essential for HR professionals and managers.

Conclusion

The 2024 reforms represent a pragmatic rebalancing of UK holiday law, providing clarity on calculations while maintaining fundamental worker protections. The reintroduction of rolled-up holiday pay and the 12.07% accrual method offers administrative simplicity for managing variable workers, addressing the unintended consequences of the Brazel ruling without reducing overall entitlements. With employers required to include overtime and commission in holiday pay calculations and enhanced carry-over rights protecting vulnerable workers, the new framework balances flexibility with fairness.

Looking ahead to 2025, businesses with January leave years will complete their first full cycle under the new rules, likely identifying remaining implementation challenges. The success of these reforms depends on clear communication between employers and workers about calculation methods, particularly for the millions affected by the new irregular hours and part-year worker classifications. As the UK continues adapting employment law post-Brexit, these holiday regulations demonstrate how domestic legislation can address practical concerns while maintaining robust worker protections.