What zero-hours workers are entitled to
Zero-hours workers are entitled to 5.6 weeks of paid annual leave per year — the same statutory minimum as any other worker. The fact that their hours vary does not change the entitlement; it changes how it is calculated and paid.
Entitlement accrues from the first day of engagement. There is no qualifying period for holiday pay.
The two lawful calculation methods
From 1 January 2024, there are two explicitly lawful methods for calculating and paying holiday for genuine irregular hours workers and zero-hours workers. Both are compliant. You choose one, apply it consistently, and document it.
| Method | How it works | When pay is received | Key requirement |
|---|---|---|---|
| Rolled-up holiday pay (12.07%) | An additional 12.07% is added to each payslip representing accrued holiday pay | With every pay packet, as the worker earns | Must be clearly labelled as holiday pay on the payslip — cannot be hidden in an hourly rate |
| 52-week average method | Worker takes leave; you calculate their average weekly pay from the previous 52 weeks worked and pay that for each leave week | When the worker actually takes leave | Keep 52 weeks of earnings data per worker; ignore weeks with no pay in the calculation |
Why both are now lawful — the legislative history
In 2022, the Supreme Court ruled in Harpur Trust v Brazel that paying a fixed percentage uplift to calculate holiday was unlawful for workers on permanent part-year contracts (such as term-time workers). That ruling applied narrowly — to workers with continuity of employment who only worked part of the year. It did not straightforwardly extend to standard zero-hours workers with no continuity between engagements.
In any case, the government legislatively reversed the practical effect of Brazel for irregular hours workers. The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which came into force on 1 January 2024, expressly permits rolled-up holiday pay at 12.07% for irregular hours workers and part-year workers. Rolled-up holiday pay is lawful again for this worker category, provided it is clearly itemised on payslips.
Current position (from 1 January 2024): For genuine zero-hours and irregular hours workers, rolled-up holiday pay at 12.07% per payslip is explicitly lawful. The 52-week average method is also lawful. You are not required to use one over the other — choose the method that suits your operation, apply it consistently, and keep records.
Which method to choose
Rolled-up holiday pay is operationally simpler for most hospitality and retail businesses. Workers are paid their holiday as they earn, every payslip. There is no leave management burden. The drawback is that workers who take unpaid leave — because their holiday pay has already been paid out — may not actually rest, which creates risks of presenteeism and fatigue.
The 52-week average method means workers receive a pay replacement when they take actual leave. It is more administratively intensive — you need rolling earnings data per worker — but more closely mirrors how permanent staff experience leave.
Either way, from April 2026 you must keep records. See below.
Where Harpur Trust v Brazel still has relevance
The Brazel ruling still has some relevance for workers on permanent contracts with term-time or part-year working patterns — for example, a permanent employee who works September to July and has a guaranteed annual contract. For these workers, the holiday entitlement calculation remains more nuanced and specialist employment law advice is worth taking.
For standard zero-hours and casual shift workers who have no guaranteed continuity between engagements, the January 2024 regulations apply and both methods are lawful.
Record-keeping requirement from April 2026
From 6 April 2026, under the Employment Rights Act 2025, all employers must keep records of annual leave and holiday pay for every worker — including zero-hours and casual staff. This is a new statutory requirement, not a recommendation.
What this means in practice: you need to record when each worker takes annual leave (or when rolled-up pay is paid), how much was paid, and how you calculated it. If a worker claims underpayment and you have no records, you cannot defend yourself regardless of which method you used.
The record-keeping gap: Most small hospitality and retail businesses have informal or non-existent holiday records for casual staff. The April 2026 requirement makes this a compliance issue, not just best practice. If this is you, the priority is implementing a system that captures this data automatically — not retrofitting manual records.
FlexiWork tracks hours and holiday pay automatically
Every shift logged builds each worker's earnings record. Holiday pay calculations — whichever method you use — are supported by the Wages module. Leave records maintained automatically to meet the April 2026 requirement.
Start free — 30 days