Guide

Rolled-Up Holiday Pay

Paying holiday as a percentage on every payslip is lawful for some workers and unlawful for others — the distinction is the working pattern, not the employer's preference.

What rolled-up pay means

Rolled-up holiday pay means adding a holiday percentage to each payslip instead of paying you when you take time off. Before April 2024 it was generally unlawful in the UK. Since 1 April 2024 it is permitted, but only for irregular-hours workers and part-year workers.

For anyone with regular hours — including part-time staff on fixed days — rolled-up pay remains unlawful. They must be paid their normal pay when they take holiday.

The 12.07% rate

The rate reflects 5.6 weeks of leave across 46.4 worked weeks: 5.6 ÷ 46.4 = 12.07%. It is applied to pay for hours actually worked, so the holiday element grows with the work done.

Worked example: 90 hours at £12.00 an hour is £1,080 of work. The holiday element is 12.07% of that, £130.36, giving £1,210.36 before tax.

What the payslip must show

The holiday element must be identifiable. A compliant payslip shows the holiday amount separately from the pay for hours worked. A single consolidated figure with no holiday line does not let you check the calculation and is unlikely to satisfy the requirement.

This is the detail most disputes turn on: not whether the percentage was right, but whether the payment can be evidenced at all.

When it is still unlawful

Three situations where rolled-up pay is not permitted:

  • Workers with regular hours, including part-timers on fixed days.
  • Workers whose hours vary only slightly and who effectively work a stable pattern.
  • Any arrangement where the "holiday" percentage is carved out of an existing rate rather than added on top.

Is it better for you?

Rolled-up pay gives you money as you earn it, but it removes the paid break. If your hours fluctuate, it can be simpler; if you would rather take paid time off, you can ask for holiday to be paid when taken instead — the employer may choose to use rolled-up pay, but the entitlement to 5.6 weeks of leave remains either way.

What you cannot lose is the total value. If rolled-up pay plus time off works out below 5.6 weeks of your normal pay, the arrangement is underpaying you.

Worked example on a monthly payslip

You work 120 hours in a month at £12.00 an hour. Pay for hours worked is £1,440. The holiday element is 12.07% of that, £173.81, giving £1,613.81 before tax.

A compliant payslip shows the £173.81 as holiday. If the slip shows only £1,613.81, you cannot verify the calculation, and the employer cannot demonstrate that holiday was paid at all. That evidential gap is what most disputes turn on.

If the percentage looks wrong

Recalculate it yourself from your hours, not from your total pay: total pay already includes the holiday element, so applying 12.07% to it overstates the figure. Multiply the pay for hours actually worked by 12.07%.

Then sanity-check against the alternative: 5.6 weeks of your normal week. Since April 2024 rolled-up pay is permitted for irregular-hours workers, but it must not deliver less in total than the leave it replaces. If it does, raise it in writing and ask for arrears.

Rolled-Up Holiday Pay — FAQs

Is rolled-up holiday pay legal?

Only for irregular-hours and part-year workers, since April 2024. It remains unlawful for workers with regular hours.

Must it be shown on my payslip?

Yes. The holiday element must be separately identifiable.

Does rolled-up pay replace my holiday?

No. You are still entitled to 5.6 weeks of leave; rolled-up pay changes how the pay is delivered, not the entitlement.

What if my employer uses it for regular part-time staff?

That is unlawful. You should either be paid when you take holiday, or the arrangement should be corrected and arrears paid.

Related guides

Work out your own figure with the holiday entitlement calculator or check what you should be paid with the holiday pay calculator.

Review and sources

Reviewed October 2026 against the Working Time Regulations 1998, GOV.UK holiday entitlement guidance and ACAS. Figures are the statutory minimum in England, Scotland, Wales and Northern Ireland; contractual terms may be more generous. Not legal advice — see the editorial policy and contact page.