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UK holiday-pay and holiday-accrual law has been reshaped in recent years, with the most significant changes affecting irregular-hours and part-year workers. The headlines have been confusing — " rolled-up holiday pay is back", " the 52-week reference period changed", " everything is different from April" — and the practical reality is more nuanced.

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This guide cuts through the noise. It sets out what actually changed, who is affected, what employers must do and what is unchanged. It is not legal advice, but it is a practical map of the things you need to be confident about.

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What stayed the same

Before the changes, much of the framework remains intact:

• 5.6 weeks of statutory paid holiday for full-time workers, scaled proportionally for part-time.
• The Working Time Regulations apply to most workers in the UK.
• Holiday pay must reflect " normal pay" — including regular overtime, commission and shift premiums where these are sufficiently regular.
• Statutory holiday continues to accrue during sickness, maternity, paternity and other family leave.
• Carry-over of statutory leave is permitted in narrow circumstances (long-term sickness, family leave, employer-prevented).

The new categories: irregular-hours and part-year workers

The biggest change is the formal recognition of two worker categories:

• Irregular-hours workers — workers whose paid hours in any pay period are wholly or mostly variable.
• Part-year workers — workers required to work only part of the year, with periods of unpaid time exceeding a week.

For these workers, statutory holiday now accrues at 12.07% of hours worked in each pay period — the equivalent of 5.6 weeks for someone working a five-day, full-year pattern.

Rolled-up holiday pay is back — for some

For irregular-hours and part-year workers only, employers can choose to pay holiday pay either as it is taken or as a 12.07% uplift on each pay period (rolled-up holiday pay). For everyone else, rolled-up holiday pay remains unlawful — holiday must be paid when leave is taken.

Where rolled-up holiday pay is used, the rules are strict:

• Pay must be 12.07% of total earnings in the pay period.
• It must be paid at the same time as normal pay.
• It must be shown as a separate line on the payslip.
• The worker must still actually take their leave; the holiday entitlement does not disappear.

The 52-week reference period

For variable-hours workers who have not opted into rolled-up holiday pay, holiday pay is calculated against the previous 52 weeks in which the worker was paid (excluding any week with no pay). This is unchanged from the previous reform that lengthened the reference period from 12 to 52 weeks. Reliable time and attendance data linked to a holiday module turns this from a quarterly pain into a routine number.

What about regular full- and part-time workers?

For workers on regular hours and a fixed pattern, very little has changed. Holiday continues to accrue on the same basis it did before, holiday pay is calculated against normal pay, and rolled-up holiday pay remains unlawful for them. The reform was deliberately targeted at the irregular-hours and part-year cohort, not at the workforce as a whole.

Carry-over rules under the reform

For all workers, the principle remains that statutory leave should be taken in the year in which it accrues. Carry-over is permitted where:

• Sickness prevented the worker from taking leave (carry-over up to 18 months from the end of the leave year, capped at four weeks).
• Family leave (maternity, paternity, adoption, shared parental, parental, etc.) prevented the worker from taking leave.
• The employer prevented the worker from taking leave (full carry-over).

Contractual leave above the statutory minimum can be carried over by agreement.

What employers should do now

• Identify each worker as regular, irregular-hours or part-year under the new definitions.
• Decide, for irregular-hours and part-year workers, whether to use rolled-up holiday pay or to pay holiday on the day taken.
• Update payroll to show holiday pay as a separate line for any rolled-up arrangement.
• Confirm holiday pay calculation for variable-hours workers uses the correct 52-week reference period.
• Update contracts and offer letters to reflect the new arrangements.
• Update the staff handbook and policy documents.
• Train managers on the new rules and the categories.

Common SME pitfalls

Three patterns tripping up small employers under the new rules:

• Applying rolled-up holiday pay to regular full- or part-time workers (still unlawful).
• Treating " irregular-hours" loosely — the legal definition is specific.
• Letting workers reach the end of the holiday year with significant unused balance and then disputing carry-over.

All three are easier to avoid with a single source of truth for hours worked and holiday taken. Annaizu's HR software, time and attendance and rota platform link these records together, which removes most of the practical risk.

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Conclusion

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The new UK holiday rules are not as dramatic as the headlines suggest, but they do require employers to work through their workforce and update arrangements accordingly. Identify each worker correctly, decide on the right pay method, update contracts and payslips, and use a single tooling stack to keep the records straight. Get those steps right and the rest follows.

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