By law, your employees get 5.6 weeks’ paid holiday every year as long as they work five days a week.
But staff on zero hours contracts won’t work the same amount of hours each week—in fact, some weeks they won’t work at all.
Yet all zero hours workers—unless they’re self-employed—still get holiday pay. Find out how to work out holiday pay for casual workers.
How to calculate zero hours contract holiday entitlement
Before you work out holiday pay for zero hours contract workers, you need to figure out how many holidays they get.
The easiest way to calculate holiday entitlement is as it accrues, meaning your staff earn holidays based on the number of hours they work.
The statutory holiday entitlement of 5.6 weeks is equal to 12.07% of the total hours worked in a year.
To calculate a zero hours worker’s holiday entitlement, multiply 12.07% by the number of hours they’ve worked. For example:
An employee on a zero hours contract who works 10 hours in a week would get 72.6 minutes of holiday pay. Here’s how you work that out:
12.07 ÷ 100 x 10 = 1.21 hours
The result is 1.21 hours, which is equal to 72.6 minutes. That means you owe your employee around 1 hour and 12 minutes holiday leave.
Don’t worry if maths isn’t your strong point. Head to the government website to use their holiday entitlement calculator.
How to calculate zero hours contract holiday pay entitlement
Once you know your staff’s holiday entitlement, you can work out how much holiday pay to give them.
You should pay them their usual hourly rate for any time off. At the end of their contract, you should also pay them for any remaining holidays they haven’t used.
Now for the maths part.
To calculate zero hours contract holiday pay, multiply the employee’s hourly wage by their holiday entitlement. For example:
An employee is eligible for 1 hour and 12 minutes of holiday pay and earns £7.83 per hour (the current National Living Wage).
Here’s how you work that out:
£7.83 x 1.12 = £8.76
What happens if I don’t give zero hours contract workers holiday pay?
Workers do get holiday pay on zero hours contracts, and it’s your responsibility to make sure you pay them what you owe.
If you don’t give eligible staff holiday pay or falsely claim they’re self-employed so you don’t have to pay them, your staff could take you to an employment tribunal.
You could then end up paying out thousands if the tribunal rules in your employee’s favour. And the penalty will probably be much more than the holiday pay you owed them.
Review how you give workers on zero hours contracts holiday pay to make sure you’re not short-changing them—for both their benefit and yours.