The 12.07% method is back! Here’s how to use it when calculating accrued holiday entitlement.
The basics
Holiday accrual meaning
Accrued holiday is the number of days off that an employee accumulates over a period of time as annual leave. The amount of annual leave accrued is calculated based on how long the employee has worked there for (for example, hours in the pay period) and the annual leave they’re entitled to per year as part of their contract.
The 12.07% method is used to calculate the amount of accrued leave the employee is entitled to within a pay period.
When should you use the 12.07% holiday accrual method?
For leave years starting from 1st April 2024 onwards, employers need to use the 12.07% accrual system to calculate leave for irregular-hours workers, casual (zero-hour) workers, and part-year workers.
For other workers with different contract types, different rules apply. For example, you can use our part time calculator to find out annual leave entitlement for part-time workers based on hours or days.
How to work out holiday accrual?
The amount of leave the employee accrues depends on their ‘pay period’, and how many hours they’ve worked within that period. Once you’ve worked out how much leave you owe the employee, they can then take this leave from their next pay period.
Often for these contract types, this is taken in hours.
Statutory leave
Holiday accrual calculation
To find out the number of hours holiday the worker has accrued, you simply do:
12.07% X HOURS WORKED = HOURS ACCRUED
You can also display this as:
0.1207 X HOURS WORKED = HOURS ACCRUED
For example, if they worked 25 hours and are paid weekly, if you multiply that with 12.07%, you’ll find out within a weekly pay period they’ll have earned 3 hours of leave (25 × 0.1207 = 3.02).
If you’re looking for how to apply this to an employee who has over 5.6 weeks of holiday, keep reading!
Enhanced leave
How to use 12.07% method for enhanced leave above 28 days
Of course, 12.07% is used when the statutory minimum holiday is provided: 5.6 weeks in an annual leave year, which equals 28 days for a full-time employee. How does this number change when an employer gives above the statutory minimum holiday entitlement,, such as 30 or 33 days?
Of course, if an employer gives more than 28 days, the percentage of holiday entitlement they’re allowed will go up accordingly.
In the calculator above, you’ll be able to calculate the annual leave entitlement for workers who are entitled to enhanced leave using the 12.07% method. We’ve also broken it down for you below.
Percentage holiday entitlement for enhanced leave, using 12.07% method
| Annual leave entitlement (days) | Annual leave entitlement (weeks) | Percentage of holiday entitlement |
|---|---|---|
| 28 | 5.6 | 12.07% |
| 29 | 5.8 | 12.55% |
| 30 | 6 | 13.04% |
| 31 | 6.2 | 13.54% |
| 32 | 6.4 | 14.04% |
| 33 | 6.6 | 14.54% |
| 34 | 6.8 | 15.04% |
| 35 | 8 | 15.56% |
Holiday entitlement calculation for enhanced leave (above 12.07%)
To work this out for yourself, the calculation is:
1. NUMBER OF HOLIDAY DAYS / 5 DAYS A WEEK = NUMBER OF WEEKS LEAVE
2. WEEKS LEAVE / WORKING WEEKS (WHICH IS CALCULATED BY DOING 52 WEEKS IN A YEAR – NUMBER OF WEEKS LEAVE)
So if a worker has 30 days holiday, the calculation would be:
30 DAYS LEAVE / 5 DAYS A WEEK = 6 WEEKS
6 WEEKS / (52-6) = 13.04%
Other considerations
How do you round up and down in holiday accrual calculations?
Holiday entitlement is to be accrued in blocks of one hour. It must be rounded up to the nearest hour if the entitlement is 0.5 of an hour or more.
- Under 30 minutes = zero hours
- Over 30 minutes and under 59 minutes = one hour
Above that, the legislation doesn’t tell you how to round up or down decimal places to reach a whole number of hours and minutes.. For example, at what point in the calculation you round up or down can change the final outcome of how much time you give your employee off. Employers should use best intentions to get it right, and be fair across your employee base.
For this reason, we have left our calculator at two decimal places, so employers can make their own choice when applying this figure to what they give to their staff members.
Holiday accrual when on maternity leave
Employees still accrue their usual holiday entitlement while on maternity leave, including any bank holidays (if part of their leave allowance). If you would normally use the 12.07% method for them, then theoretically this would still apply – however this will depend on their contract type and details.
Read our maternity guide here to learn more, and please seek advice if you’re unsure how to apply legislation.
Is holiday accrual lawful in 2024?
Yes, holiday accrual is lawful to use after 1st April 2024 for workers who have these contract types:
- Part-year workers
- Irregular hours workers
- Casual / zero-hour contract workers
In 2022, due to the somewhat controversial Harpur Trust v Brazel case, the 12.07% method was deemed unlawful, which made holiday calculations quite tricky. However, to the delight of HR professionals, legislation came into effect in January 2024 to reinstate the 12.07% method. This has simplified the holiday calculations for these types of workers, which was particularly beneficial to the hospitality and retail industries.
Other holiday calculation resources
Check out our other calculators to help with your holiday calculations:
