Key takeaway
Rolled-up holiday pay is lawful only for irregular-hours and part-year workers, for leave years beginning on or after 1 April 2024. Everyone else is paid holiday when leave is taken. Whichever method applies, keep a record of each calculation for six years, including the method, the rate and any weeks averaged.
Rolled-up holiday pay is lawful only for irregular-hours and part-year workers, for leave years beginning on or after 1 April 2024. Salaried and fixed-hours staff must be paid for holiday when they take it. Security and cleaning rosters mix both kinds of worker, so keep a written decision for each person. Where rolled-up pay applies, the employer adds an uplift to each pay period, 12.07% by default, and shows it as a separate line. Whichever method you use, you must keep records that show how each payment was worked out, and the Working Time Regulations 1998 set that period at six years. This guide covers who can be paid rolled-up, how holiday entitlement differs from holiday pay, how the 12.07% figure rounds, and what a holiday-pay record should hold. It is a records and process checklist, not legal advice. Confirm each contract with an employment adviser before you change method.
Who can be paid rolled-up holiday pay?
Only irregular-hours and part-year workers can lawfully be paid rolled-up holiday pay, for leave years beginning on or after 1 April 2024. Salaried and fixed-hours staff cannot. Paying them a rolled-up uplift instead of holiday pay when leave is taken underpays them, and ShiftTracker's own documentation warns of exactly that.
Security and cleaning rosters can mix people on fixed weekly patterns with people who take whatever shifts are offered. One site can hold both. Classify each person from the contract and the hours they actually work, and write the decision down. If a contract is unclear, ask your employment adviser before you choose a method.
Holiday entitlement versus holiday pay
Holiday entitlement is the time off a worker is owed: 5.6 weeks a year under the Working Time Regulations 1998. Holiday pay is the money paid for that time. Rolled-up pay changes when the money is paid. The leave itself still exists, and you still need to record when it is taken.
Keep the two records apart. Entitlement is a count of leave days or hours used and left. Pay is a calculation with a rate, a method and a date. A worker who has used all their leave still has a pay record for each payment, and an auditor will ask for both.
How the 12.07% rate works, with rounding examples
The 12.07% rate is 5.6 weeks of leave divided by the 46.4 weeks left in a 52-week year. Applied to pay, it adds 12.07 pence for every pound earned. On £560 of pay in a week, the uplift is £67.59 after rounding to the nearest penny.
The £560 is an illustrative week, 40 hours at £14.00. The exact uplift is £67.592. Rounded each week, 52 weeks come to £3,514.68. Unrounded, the same year comes to £3,514.78. Ten pence a year is small, but pick one rounding rule, apply it to every pay period and record it. If your contracts give more than 5.6 weeks of leave, 12.07% is too low. ShiftTracker lets you raise the uplift and will not accept anything below 12.07%.
How the 52-week average pays leave-time holiday
Under the 52-week average, holiday pay is paid when leave is taken. A week's pay is the average of the last 52 weeks in which the employee was paid, skipping unpaid weeks and looking back no further than 104 weeks. ShiftTracker uses this method by default and keeps the weeks it averaged.
Because the figure follows recent earnings, the same worker can be paid a different amount for a week of leave in March than in September. That is expected. The record must show why, which means keeping the weeks used and what was paid in each.
What to record for every holiday-pay payment
Section 35 of the Employment Rights Act 2025 added regulation 16B to the Working Time Regulations 1998. It requires records adequate to show you complied with the holiday and holiday-pay rules, kept for six years from the date they are made, in any manner and format you reasonably think fit. It took effect on 6 April 2026.
A practical record for each payment holds:
The worker, and the contract basis you relied on (irregular-hours, part-year or fixed-hours).
The method in force and the date it applied from.
The leave dates and the hours or days taken.
For the 52-week average, the weeks used and the pay in each.
For rolled-up pay, the uplift percentage and the pay period it was added to.
The rounding rule, who approved the leave and when.
The export reports and payroll files guide covers the files you can download for payroll and for your own evidence pack.
How ShiftTracker records holiday pay
ShiftTracker holds one holiday-pay method for the whole organisation, set under Settings, Holiday Pay by an Admin or Manager. Choose the 52-week average or rolled-up at 12.07%. When a manager approves annual leave, ShiftTracker works out that leave's pay and records the calculation, including the weeks averaged.
The holiday pay and bank holidays guide sets out each option. Holiday pay then appears on the Pay Detail report. ShiftTracker cannot tell you which method your contracts require.
Two limits matter. The method is organisation-wide, and no screen sets a different method for one employee today, so a business with both fixed-hours and irregular-hours staff should agree a plan with its adviser first. Rolled-up pay also does not cover sick pay or statutory leave pay, which still use the 52-week average.
Payroll arbitration supports the evidence trail. Each record takes the employee's pay rate from their Payroll tab when it is written. Marking a record paid locks it and saves a permanent snapshot. Only an Admin can change a locked record, and the reason is kept in the audit trail.
Overtime, allowances and sick pay
A holiday-pay calculation depends on what counts as pay. Regular overtime, shift allowances and bank holiday premiums can all change a week's pay, and whether each one counts is a question for your employment adviser. ShiftTracker records the weeks it averaged and cannot tell you what the law brings in.
Hours worked on a registered bank holiday are paid at double time in ShiftTracker, but only for dates you have added under Settings, Bank Holidays. Add them before the shifts are arbitrated, because arbitration does not go back over existing records. Write down how your payroll treats each pay element, so the answer is the same every time.
Checklist before you change method
Before you switch between rolled-up pay and the 52-week average, confirm each worker's contract basis, agree the date the change applies from, and tell your workers. Then test the calculation on real leave. Work in this order, because the record you keep from the change date is the evidence you will rely on later.
Check each worker's contract and actual hours with your employment adviser.
Choose the method under Settings, Holiday Pay and press Save.
If you use rolled-up pay, set the uplift. It cannot go below 12.07%.
Register bank holiday dates before arbitrating the shifts on them.
Approve a real leave request and compare the recorded calculation with your own sums.
Store the calculation records, with the method and change date, for six years.
This article was checked against legislation.gov.uk and ShiftTracker's documentation in October 2026. Employment law changes, so confirm current rules before you act.
