How this is calculated
Weekly basic pay is calculated from the average hours entered multiplied by the hourly rate, then the statutory 12.07% rolled-up holiday pay uplift is added, reflecting the lawful method for compensating irregular hours workers for statutory annual leave introduced for holiday years starting on or after 1 April 2024. This weekly total is annualised and then passed through the standard 2026/27 income tax and employee NI calculations to estimate net pay.
Because zero hours pay is inherently variable, this calculation is only as reliable as the average hours figure entered; a worker whose hours fluctuate significantly month to month should treat the result as an indicative average rather than a guaranteed figure for any single pay period.
Rights of zero hours workers
Zero hours workers are entitled to the National Minimum or Living Wage for all hours worked, statutory holiday pay (commonly via the rolled-up method described above), rest breaks, and protection from detriment for refusing to accept work offered, among other statutory rights that apply regardless of the absence of guaranteed hours. Recent and ongoing employment law reforms have focused on requiring reasonable notice of shifts and compensation for shifts cancelled at short notice, which businesses using zero hours contracts should monitor closely.
Continuous service for statutory rights such as unfair dismissal protection can still build up under a zero hours contract, provided there are no gaps of a complete week without work, so employers should not assume zero hours automatically means no accruing employment rights.
Managing zero hours arrangements well
Clear, consistent record-keeping of hours offered, worked and declined protects both employer and worker if a dispute arises, and helps ensure holiday pay and average earnings calculations for statutory payments like SSP or SMP are accurate when needed. Businesses relying heavily on zero hours staff should also review whether National Minimum Wage compliance holds up once travel time, training, or on-call periods are properly accounted for.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Do zero hours workers get holiday pay?
Yes, zero hours workers accrue statutory holiday entitlement the same as any other worker, most commonly paid through the 12.07% rolled-up holiday pay method permitted for irregular hours workers since April 2024.
Can an employer refuse to offer any hours on a zero hours contract?
Yes, that is the basis of the contract, but the worker is also free to refuse offered hours without penalty, and recent reforms have introduced expectations around reasonable shift notice and cancellation compensation.
Does continuous service build up on a zero hours contract?
It can, provided there is no gap of a complete week without any work, which means statutory rights such as unfair dismissal protection may still accrue over time even without guaranteed hours.
Are zero hours workers entitled to at least the National Minimum Wage?
Yes, all hours actually worked must be paid at least the National Minimum or National Living Wage rate for the worker's age, with no exception for the zero hours nature of the contract itself.