How to Calculate Annual Leave for Part-Time Employees

Holiday calculations without the headache

How To Calculate Annual Leave For Part-Time Employees (Without the Headache)

If you've ever sat there thinking, "Holiday should be simple... why does this feel like maths homework?", you are not alone.

This is one of the most common questions I get from small business owners, especially when they've got a mix of part-time staff, different working patterns, and bank holidays popping up like surprise quiz questions.

So here's the straight-talking version. No fluff. No panic. Just what you need to calculate annual leave properly and avoid accidental underpayments.

Hazel (our Chief Wellbeing Officer) would like to add that she fully supports time off, as long as it includes a walk and a biscuit.

Quick Answer Box

• Do this: calculate holiday based on days or hours, then be clear about bank holidays.
• Avoid this: guessing, rounding down, or mixing up the 12.07% method with rolled-up holiday pay.
• Write down: your method in the contract or handbook so everyone's working from the same rules.

The legal minimum in the UK

The legal minimum holiday entitlement is 5.6 weeks of paid holiday per year.

For someone working 5 days a week, that works out as 28 days.

Bank holidays can be included in that total if your contract or handbook says they are.

Official guidance: https://www.gov.uk/holiday-entitlement-rights

The bit people miss with part-time staff

Part-time staff get the same 5.6 weeks, just pro-rated to what they work.

So the goal is not "make it feel the same". The goal is "make it correct and consistent".

And if you offer more than the legal minimum holiday, that extra holiday should be pro-rated too for part-time staff. Otherwise it's very easy to end up treating people unfairly without meaning to.

First, decide if you measure holiday in days or hours

You can measure holiday in:

• days if they work the same hours each working day
• hours if their hours vary across the week

Pick the option that matches their working pattern. That's half the battle.

Method 1: Part-time with fixed working days (calculate in days)

If someone works a set number of days each week, use:

Days worked per week x 5.6 = holiday entitlement in days

Example

Flossie works 3 days a week.

3 x 5.6 = 16.8 days

You should not round down. Many businesses round up (often to the nearest half day) so it's practical.

So Flossie would usually be given 17 days.

Method 2: Part-time with variable daily hours (calculate in hours)

If someone works different hours on different days, it's often easier and fairer to calculate in hours:

Hours worked per week x 5.6 = holiday entitlement in hours per year

Example

Flossie works 20 hours per week.

20 x 5.6 = 112 hours holiday per year.

Bank holidays and part-time staff (the part that causes arguments)

Bank holidays are not automatically extra holiday.

You can include bank holidays within the 5.6 weeks, as long as the contract or handbook makes this clear.

The issue for part-time staff is that most bank holidays land on Mondays. So if you close on bank holidays and someone doesn't normally work Mondays, they can feel like they're missing out compared to someone who does work Mondays.

The cleanest way to avoid the "it's not fair" conversations is often:

• give everyone a total entitlement (days or hours)
• be clear whether bank holidays are included
• and let people book leave from their allowance

ACAS guidance on bank holidays: https://www.acas.org.uk/checking-holiday-entitlement/bank-holidays-and-christmas

Hazel's view is all bank holidays should fall on sunny days. If only.

Zero-hours and irregular hours workers (two separate things)

This is where people get mixed up, so I'm going to make it really clear.

1) When to use 12.07%?

Use 12.07% to calculate holiday entitlement building up for people who don't have fixed hours.

This is for:

• zero-hours workers
• people whose hours change week to week
• part-year workers (they do not work for at least a week at a time during the holiday year)

For leave years starting on or after 1 April 2024, statutory holiday entitlement builds up at:

12.07% of hours worked in each pay period

A pay period is how often you pay them (weekly, fortnightly, monthly).

Example

Flossie works 50 hours in a month.

50 x 12.07% = 6.035 hours holiday built up that month.

Important points:

• 12.07% is about entitlement building up
• if you offer more than the legal minimum holiday, the percentage changes

ACAS guide: https://www.acas.org.uk/irregular-hours-and-part-year-workers

GOV guidance: https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024

2) When to use rolled-up holiday pay?

Rolled-up holiday pay is not a calculation method for entitlement. It is a way of paying holiday pay.

It means holiday pay is added to each payslip, rather than being paid when holiday is taken.

Rolled-up holiday pay can only be used for:

• irregular hours workers
• part-year workers

It should not be used for:

• employees with fixed hours and normal working patterns

If you use rolled-up holiday pay, it must be:

• shown separately on the payslip
• paid each pay period
• paid at least at the correct rate

And even if you use rolled-up holiday pay, people should still be encouraged to actually take holiday. Otherwise you end up with tired staff and grumpy managers and nobody wins.

ACAS rolled-up holiday pay guidance: https://www.acas.org.uk/irregular-hours-and-part-year-workers/rolled-up-holiday-pay

Holiday pay for variable hours (quick note)

For irregular hours and part-year workers, holiday pay is usually based on average pay over the previous 52 weeks (ignoring weeks where they were not paid).

ACAS holiday pay guidance: https://www.acas.org.uk/irregular-hours-and-part-year-workers/calculating-holiday-pay

Accrual in the first year

In the first year of employment, you can use an accrual approach.

That usually means someone builds up holiday over time, often at one twelfth of their annual entitlement each month.

It can be helpful when someone starts part way through your holiday year and you want to keep it tidy.

Record keeping (boring but important)

From 6 April 2026, employers must keep records of annual leave and holiday pay for at least 6 years.

Translation: if there's a dispute, you need to be able to prove what you did.

ACAS info: https://www.acas.org.uk/employment-rights-act-2025

Hazel asked if "I definitely approved it in my head" counts as a record. Sadly, no.

Common mistakes (and the fix)

• Mistake: rounding down holiday

Fix: don't round down. Round up if needed.

• Mistake: bank holidays treated as extra without clear wording

Fix: spell out whether bank holidays are included.

• Mistake: using days when hours vary

Fix: use hours if daily hours vary.

• Mistake: mixing up 12.07% and rolled-up holiday pay

Fix: 12.07% is how entitlement builds up. Rolled-up is how holiday pay is paid.

• Mistake: forgetting enhanced holiday must be pro-rated too

Fix: pro-rate anything above statutory as well.

A script you can use (copy and paste)

If a part-time employee says: "It's not fair, I don't get bank holidays."

You can say:

"Bank holidays are included within the overall holiday entitlement. Because bank holidays often fall on Mondays, different working patterns can look different. Your holiday entitlement is still pro-rated correctly, and you can use your allowance to book time off when you need it."

What to write down

Make sure your contract or handbook clearly states:

• the total holiday entitlement in days or hours
• whether bank holidays are included or in addition
• holiday year dates
• how you calculate holiday for irregular or zero-hours workers
• how holiday pay is handled for irregular hours workers, including if you use rolled-up holiday pay

If you're using an HRIS system

Use it to:

• record working patterns and hours
• calculate entitlements consistently
• show balances clearly
• keep approvals tidy
• store holiday records safely (and long enough)

Holiday goes wrong when it lives in someone's inbox and a manager's memory.

FAQs

What is the legal minimum holiday for part-time staff?

5.6 weeks per year, pro-rated to their working days or hours.

Can we include bank holidays in holiday entitlement?

Yes, as long as it's clear in the contract or handbook.

Do we have to give part-time staff bank holidays off?

Not automatically. What matters is that the overall entitlement is correct and your policy is clear.

Can we round holiday entitlement?

Don't round down. Many employers round up.

Should we calculate holiday in days or hours?

Days for fixed working patterns. Hours for variable patterns.

When do we use 12.07%?

Use 12.07% to calculate statutory holiday entitlement building up for irregular hours and part-year workers, per pay period.

When do we use rolled-up holiday pay?

Only if you have irregular hours or part-year workers and you want to pay holiday pay in each payslip instead of when holiday is taken. It must be shown separately on the payslip.

What if we've got it wrong in the past?

Fix it now. It's nearly always easier to correct it than to defend it later.

Bottom line

• 5.6 weeks is the legal minimum, pro-rated for part-time staff
• use days for fixed patterns, hours for variable patterns
• bank holidays can be included, but your wording must be clear
• 12.07% is for building up entitlement for irregular hours workers
• rolled-up holiday pay is a payment method for irregular hours and part-year workers only
• keep good records and keep them long enough

Right, what do you do now?

If you're not sure your holiday calculations are correct, your bank holiday wording is vague, or you have zero-hours staff and you're not 100% confident your approach is right, this is exactly the sort of thing we pick up in an HR Health Check.

No judgement. Just a clear view of what's working, what's risky, and what to fix first.

Book your HR Health Check here: https://www.kateunderwoodhr.co.uk/hr-health-check/