All staff members who take paid holiday should be paid the same rate that they're normally paid for their work. A week's pay is calculated according to the kind of hours someone works and how they're paid for the hours.
A shift worker with fixed hours should receive holiday pay equal to the average number of weekly fixed hours the worker worked in the previous 52 weeks, at their average hourly rate.
Casual workers (including those on zero-hours contracts) are entitled to holiday pay. A casual worker should receive holiday pay equal to the average number of weekly hours the worker worked in the previous 52 weeks, at their average hourly rate. The 52-week period excludes any weeks not worked for which no pay was received. Casual workers are also eligible for payment in lieu of any untaken statutory paid holiday on termination of their employment. This reflects the same rights given to full-time and part-time employees.
How to calculate casual workers’ holiday entitlement
To work out a casual workers' holiday entitlement you work out their average pay over the previous 52 weeks, and ignore any weeks not worked. In practice, this means that you need to:
1. Determine the 52-week period immediately before the worker started their holiday
Rely on the whole last week in which the worker worked their contracted hours, ending on (or before) their first day of leave. Generally, a week runs from Saturday to Sunday. However, if a worker’s pay is calculated in reference to a different 7-day period (eg Wednesday to Tuesday), you should use that period to determine the worker’s work week.
In your 52-week calculation, you should ignore any weeks in which the worker:
To replace any ignored weeks, you should use earlier weeks to calculate the total of 52 weeks. You can count as far back as 104 weeks to build a worker’s appropriate 52-week period.
If you don’t have a full 52-week period in which the worker was paid (eg if they’ve worked for you for less than 52 weeks), you should use the maximum number of full weeks the worker worked and was paid. Again, you should exclude any weeks in which they were not paid.
2. Calculate the worker’s normal pay over the 52-week period
To determine the worker’s pay, you should add together the following payments the worker received over the 52 weeks:
any regular commission payments (eg monthly sales commissions), and
any regular bonuses (eg regular monthly bonuses, but not discretionary bonuses, like Christmas bonuses)
3. Calculate the worker’s average pay
Calculate the worker’s average:
weekly pay - divide the worker's normal pay that you determined in step 2 by 52
daily pay - divide the worker's normal pay that you determined in step 2 by the number of days worked in the 52-week period
hourly pay - divide the worker's normal pay that you determined in step 2 by the number of hours worked in the 52-week period
Once you have the worker’s average pay, you then multiply their weekly, daily or hourly pay by the appropriate period of leave. This will give you the holiday pay for the casual worker.
For more information, see the Government’s guidance.