Most people assume holiday pay is simple: a fixed number of days a year, paid at your normal rate. That works for a salaried job with a set Monday-to-Friday pattern. It does not work for a shift worker whose rota changes each week, a bank nurse who takes whatever cover comes up, or a part-year worker who starts in September and leaves in June. For them, the statutory leave is still 5.6 weeks a year, but it builds up differently, and that is where payslips quietly undercount.
The basic entitlement
Under UK law, a full-time worker is entitled to 5.6 weeks of paid leave a year. For someone who works five days a week, that is 28 days. A part-timer gets the same 5.6 weeks, pro-rated to the days they usually work, so a worker on three days a week gets 16.8 days. The pattern of hours is what changes the maths when the hours do not repeat.
The 5.6-week figure is a statutory minimum. Your contract can give more, and many employers do. The statutory part is the one the government sets, and it is what you can rely on if the employer falls short.
What the 12.07% method is
For workers whose hours are irregular, or who work part of the year, statutory leave can be calculated as 12.07% of the hours actually worked in the leave year. The percentage is not arbitrary. Five and a half weeks is 12.07% of a 46.4-week working year, which is 52 weeks less the 5.6 weeks of leave itself. You do not need to memorise the derivation. You need to know the number and check whether your payslip uses it.
Take a worker who clocked up 1,200 hours in a leave year. Twelve point zero seven per cent of 1,200 is about 145 hours of paid holiday. If their average shift is eight hours, that is roughly 18 days. Each hour worked earns a small slice of leave as it happens, rather than waiting for a fixed anniversary.
The method has an edge case worth flagging. Some workers are on a mix of fixed and variable hours, and some employers use a different calculation for them. If you are not sure which method applies, ask for the calculation in writing. A vague answer is itself a warning sign.
What you are paid while on leave
Holiday pay for irregular hours is not simply your basic rate multiplied by the leave hours. For workers whose pay varies, the calculation uses an average of earnings over a reference period. In most cases that is the 12 weeks before the leave starts, with any weeks reduced by sickness or unpaid absence removed, and the average is then applied to the leave.
Overtime and commission can count, depending on whether they are regular. A worker whose rota reliably includes Saturday shifts may find those shifts should count in the average. Check the payslip and the reference-period breakdown, not just the total.
The National Minimum Wage is a floor here too. The adult rate from April 2026 is £12.71 an hour (check gov.uk for the current figure), so a worker on the minimum who takes 40 hours of leave should be paid at least £508.40 for that leave. If the holiday pay for that week comes in lower, something is wrong with the calculation.
A worked example of what goes wrong
Imagine a retail worker who works between 18 and 32 hours a week, averaging 25. Their employer pays holiday as a flat 12.07% of each pay packet, which is a common shortcut. In a typical week that is roughly right. In a month with two very short weeks followed by a long one, the flat percentage can fall behind the entitlement, because leave is being accrued on pay rather than on the hours the statutory method counts.
The fix is not to argue about every penny. Ask the employer which method they use, and check that holiday accrual adds up across the leave year. A discrepancy of a few hours is the kind of error that accumulates quietly and then appears as a dispute at the end of the year.
Part-year workers and the end of the year
A worker who joins in September and leaves in June has a leave year that does not match the calendar. Many employers pro-rate the entitlement to the months worked, which is legitimate. Some pay out untaken leave on leaving and some do not, so ask how it is handled before you resign. If you have accrued leave and your last day is set, the payment for untaken holiday should appear on your final payslip.
The Employment Rights Act 2025 is being phased in and includes changes to holiday rules, so the detail may move within a year. Check gov.uk and your employer's written policy before relying on any figure in this article.
Questions to put to your employer in writing
A verbal answer about holiday is easy to forget and hard to prove. Put the questions by email and keep the reply. Ask which method payroll uses to accrue leave for irregular hours, and whether it is 12.07% of hours worked or a different calculation. Ask for the reference period used to calculate holiday pay, and which weeks are excluded from it. Ask how many hours of leave you have accrued so far in the leave year, and how much carries over if you have not used it.
Ask what happens to untaken leave if you leave the company, and whether the answer depends on the reason for leaving. Ask whether bank holidays are included in your statutory entitlement or added on top, because the answer changes the total you should see. If your contract says one thing and the payslip does another, the contract is a useful starting point, but the statutory minimum is what you can enforce if the gap is large.
If the employer cannot or will not explain the calculation, note that. Most payroll teams can show the working in a few minutes, and a refusal is a reason to check the figures independently or take advice from ACAS, the Advisory, Conciliation and Arbitration Service, which offers free guidance on holiday pay disputes.
Bank holidays and rounding
Bank holidays are a common source of confusion. In the UK the 5.6-week statutory entitlement can include bank holidays, so an employer who adds them on top of 5.6 weeks may be giving more than the minimum. Check whether your contract says the bank holidays are inside the entitlement or extra to it, because a figure that looks generous can hide a shortfall elsewhere.
Rounding also matters. Leave is often counted in hours, and a payslip that rounds each week to the nearest hour can drift over a year. A difference of an hour a week looks trivial until you add up fifty-two weeks, and it is worth asking how the system rounds before you assume the total is right.
What to check this week
Pull out your last three payslips and look for a holiday line with an hours figure, not just a pound value. Multiply your hours in the leave year by 12.07% and compare the result with the hours you have been credited. Then check that your reference-period average includes the shifts you regularly work. If the numbers do not match, put the question in writing and keep a copy.
Most workers who check find nothing wrong. The ones who find an error usually found it by accident, which is why the check is worth doing on purpose.