Do Supply Teachers Get Holiday Pay? The 12.07% Rule

Lawful, then unlawful, then lawful again — and why the internet is still wrong about it

Almost every confusing thing about supply teachers' holiday pay traces back to one fact: the law on this has reversed itself twice in twenty years, and a great deal of the advice circulating online — including advice sitting on agency websites and in union FAQ pages that have not been revisited — was written during one of the earlier phases. Before you can work out whether your own payslip is right, you need to know which phase you are in.

For a long stretch in the early 2000s, rolling holiday pay into the hourly or daily rate was simply how a large part of the temporary labour market operated. The employer added a percentage to the rate, called it holiday pay, and considered the Working Time Regulations satisfied. That practice was killed by the European Court of Justice in Robinson-Steele v RD Retail Services (C-131/04) in 2006. The reasoning matters, because it explains the shape of the rules that replaced it. The Working Time Directive does not exist to give workers extra money; it exists to make sure they actually stop working. Paying the holiday money in advance, spread thinly across every pay packet, means that by the time the worker wants to take a week off, the money for that week has already been spent on ordinary living costs. The financial incentive runs the wrong way: it discourages the worker from taking the rest the Directive is there to guarantee. On that basis the Court held that rolled-up holiday pay was incompatible with the Directive, and UK employers spent the next eighteen years being told it was unlawful.

The second shock came from a very different direction. In Harpur Trust v Brazel [2022] UKSC 21, the Supreme Court considered a visiting music teacher engaged on a permanent, year-round contract who only actually worked during term time. Her employer calculated her holiday pay using the 12.07% method, pro-rating her entitlement down to reflect the weeks she did not work. The Supreme Court held that this was wrong: a worker on a year-round contract is entitled to the full 5.6 weeks of statutory leave, calculated on average weekly pay, regardless of how few weeks they actually worked. The 12.07% shortcut could not be used to cut a part-year worker's entitlement down. The decision was legally orthodox and practically explosive — it meant that a large population of term-time-only staff, including a great many people working in schools, had been under-paid for years, and that the arithmetic could produce a proportionately more generous outcome for someone who worked ten weeks a year than for a full-time colleague.

The Government's legislative answer to Brazel is the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (SI 2023/1426). It was made in 2023 and came into force on 1 January 2024, but the holiday provisions apply only to leave years beginning on or after 1 April 2024 — which is why, for a period in 2024, two different regimes were running side by side depending on when a particular employer's leave year happened to start. Those Regulations did two things at once. They restored a statutory accrual method for irregular hours and part-year workers, and they reversed Robinson-Steele in domestic law by making rolled-up holiday pay lawful again.

That is the crucial nuance. Parliament did not simply undo Robinson-Steele and go back to the pre-2006 free-for-all. It opened a narrow lane. Inside the lane, rolling up is lawful and convenient. Outside the lane, the Robinson-Steele objection still stands and rolling up is as unlawful today as it was in 2010. An enormous amount of practical trouble in supply teaching comes from umbrella companies applying the lane's rules to workers who are not in the lane.

The three conditions, all of which must be met

Where a worker does qualify, SI 2023/1426 permits rolled-up holiday pay only if all three of the following are true. These are cumulative, not alternatives. Failing any one of them makes the payment non-compliant, even if the other two are handled perfectly.

• The rate. The uplift must be calculated at at least 12.07% of the worker's total pay for work done in that pay period. Note the words “at least” — 12.07% is the statutory minimum, not the statutory figure.
• The timing. It must be paid at the same time as the pay for the work done in that pay period. Not a month later. Not at the end of term. Not when you ask for it. The same payment run as the wages it relates to.
• The transparency. It must be shown as a separate, clearly itemised payment on the payslip. A day rate described as “inclusive of holiday pay” with no separate line does not satisfy this, whatever the contract says.

The third condition is the one that does the most practical work, and it is the reason this guide spends so much time on payslips. Before 2024, an agency could tell a supply teacher that holiday pay was “built into the rate” and there was no easy way to test the claim. Since April 2024, the law requires the number to appear on its own line, which means the claim is now testable in about ninety seconds by anyone who can use a calculator. An umbrella company that has not put a separate holiday pay line on your payslip has not merely been untidy — it has failed a statutory condition, and the absence of the line is itself evidence.

The second condition deserves a word too, because it is the one that most directly reflects the Robinson-Steele reasoning. The whole point of requiring simultaneous payment is that the worker can see the holiday element arriving alongside the work element and can identify it as what it is. An umbrella that accumulates the 12.07% and pays it out quarterly is not doing rolled-up holiday pay at all — it is doing accrual-and-hold, which is a different model with different rules, covered further down this page.

Where 12.07% actually comes from

The number is not arbitrary and it is not a negotiated industry convention. It falls straight out of the statutory leave entitlement, and it is worth being able to derive it yourself, because being able to derive it is what lets you spot when someone has derived it wrongly.

Statutory annual leave in the UK is 5.6 weeks a year. A year contains 52 weeks. If 5.6 of those weeks are leave, then the number of weeks actually worked is:

52 − 5.6 = 46.4 working weeks

The percentage is applied to the pay you receive for time you have actually worked. So the question it answers is: what uplift on the pay for 46.4 weeks of work funds 5.6 weeks of leave at the same weekly rate? That is simply the ratio of leave weeks to working weeks:

5.6 ÷ 46.4 = 0.120689… = 12.07%

The logic is the same as adding VAT: you are grossing a figure up from a base that excludes the thing you are adding, not taking a slice out of a total that already includes it. Getting the denominator right is the whole game.

The 10.77% error, and what it costs you

The most common miscalculation in this area is to divide 5.6 by 52 rather than by 46.4:

5.6 ÷ 52 = 0.10769… = 10.77%

That looks perfectly reasonable on the page. Five point six weeks out of fifty-two weeks — of course. The problem is that it treats the 5.6 leave weeks as if they were part of the base you are applying the percentage to, when in fact the base is your pay for worked time only. Applying 10.77% to worked pay under-funds the leave, because it assumes the leave weeks were themselves generating pay. The shortfall is about 1.3 percentage points of everything you earn.

A supply teacher earning £24,000 in pay for work over a year is £312 out of pocket — roughly two days' gross pay, quietly missing, spread so thinly across the year that no single payslip looks obviously wrong. That is precisely why the error survives: it is invisible at the scale of one payment and material at the scale of a year. Over three years of steady supply work at that level, it is more than £900.

Who is allowed to be paid this way: regulation 15F

Rolled-up holiday pay is available only to two categories of worker, both defined in regulation 15F of the Working Time Regulations 1998 as amended by SI 2023/1426. These are statutory definitions with specific wording, and the wording repays close reading, because agencies and umbrellas routinely treat “supply teacher” as if it were itself a category. It is not.

Irregular hours worker

A worker is an irregular hours worker in relation to a leave year if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable. Three things follow from that phrasing:

• The test is about the terms of the contract, not about what happened to occur in practice. A contract that fixes your hours does not become variable because the school sent you home early one Tuesday. Conversely, a genuine zero-hours or ad hoc booking contract is variable by its terms even if you happen to have worked five days every week for a term.
• It is measured per pay period — so for a weekly-paid supply teacher, the question is whether the paid hours vary week to week, not whether they vary across the year.
• Where a worker holds more than one contract with the same employer, the definition looks at those contracts in the round rather than testing each in isolation. That matters for umbrella companies that issue a fresh assignment schedule for every booking.

Part-year worker

A worker is a part-year worker in relation to a leave year if, under the terms of their contract, they are required to work only part of that year and there are periods within that year, during the term of the contract, of at least a week which they are not required to work and for which they are not paid. Both limbs must be satisfied: the gap must be a week or longer, and — critically — it must fall inside the term of the contract. Gaps between two entirely separate contracts are not gaps within a contract.

You need to satisfy only one of the two, not both. But you do need to satisfy one, and an umbrella company cannot create eligibility by asserting it in a contract clause. The definitions are statutory tests applied to the substance of the arrangement.

Four real supply patterns, tested against the gate

Here is where the abstraction becomes useful. Supply teaching is not one working pattern, it is at least four, and they do not all land in the same place.

1. The day-to-day ad hoc supply teacher

You are registered with an agency, you take the calls that come, and a typical fortnight might be three days, then none, then five, then two. Your contract does not commit the umbrella to offering you any particular number of hours and does not commit you to accepting them. The paid hours in each pay period are, under the terms of the contract, wholly or mostly variable. You are an irregular hours worker. Rolled-up holiday pay at 12.07% or more, paid alongside your wages and itemised separately, is lawful and is very likely what you should be seeing. This is the paradigm case the legislation was written for.

2. The regular two-days-a-week supply teacher

You cover the same PPA slots at the same school every Tuesday and Wednesday, term after term. If the contract fixes those two days, the paid hours per pay period are not variable — they are two days, every week, by agreement. On the face of it you fail the irregular hours test. Whether you pass the part-year test depends on the architecture of the paperwork: if there is an overarching contract running across the academic year with unpaid half-terms and holidays sitting inside it, the part-year definition looks satisfied. If instead each half-term is papered as a discrete engagement that simply ends at the break, the unpaid weeks are not within the term of the contract and the analysis gets genuinely murky. This is the pattern where it is most worth asking the umbrella, in writing, which category it has placed you in and why.

3. The long-term fixed-timetable maternity cover

You have a booking covering a maternity leave: Monday to Friday, a fixed timetable, from September to Easter. Your hours are not variable in any meaningful sense — they are the hours of a teaching job. You are very unlikely to be an irregular hours worker. You may or may not be a part-year worker depending on the contract's span and its unpaid gaps. If you are neither, rolled-up holiday pay is unlawful for you, and the fact that your umbrella has applied a tidy 12.07% changes nothing. Your holiday pay should be calculated under the ordinary rules using a 52-week reference period, and you should be paid when you take leave. This is the single most valuable distinction on this page, and almost nobody explains it at the point of booking.

4. The teacher with bookings through two umbrella companies

You take ad hoc work through umbrella A and hold a long-term fixed booking through umbrella B. Each umbrella is a separate legal employer, and the “in the round” rule in regulation 15F applies to multiple contracts with the same employer. It does not aggregate across employers. So you can be an irregular hours worker for umbrella A and not for umbrella B simultaneously, with lawfully rolled-up holiday pay on one payslip and a wholly different mechanism on the other. That is not an error; it is what the definitions produce. It also means you have to check the two payslips against different standards.

If you are not in the lane: the 52-week reference period

Where a worker is neither an irregular hours worker nor a part-year worker, holiday pay reverts to the ordinary method: a week's pay for a week's leave, with a week's pay calculated as the average of your weekly pay over a 52-week reference period. Two features of that calculation matter for supply teachers.

• Weeks in which you received no pay are ignored and not counted towards the 52. They are skipped over, not averaged in as zeros. For someone whose work is seasonal, this makes a very large difference to the result.
• Because unpaid weeks are skipped, the employer may need to look back further than 52 weeks to find 52 paid ones — up to a maximum of 104 weeks. If there are fewer than 52 paid weeks even in that two-year window, the average is taken over however many paid weeks there are.

The practical consequence is that under this method your holiday pay is paid when you take the leave, at your average weekly rate, rather than dripped into every payment. It is administratively heavier for the umbrella and it is the reason so many of them would rather treat everybody as an irregular hours worker. It is also, for a teacher on a long-term fixed booking, usually the more valuable arrangement, because the money arrives as a block at the point you actually stop working.

The accrue-and-hold alternative

Rolling up is not the only model an umbrella company can run, and it is not the only one you will encounter. The alternative — which was the standard approach for the eighteen years between Robinson-Steele and the 2024 reforms, and which many providers never moved away from — is accrual and retention. The umbrella calculates the same 12.07% on each payment, but instead of paying it to you it holds it in a notional pot, which it pays out when you request leave, or in a lump at the end of the engagement or the leave year.

Neither model is inherently better; they fail in different directions. Rolled-up pay is safer in the sense that the money is unambiguously yours the moment it lands, but it shifts the entire budgeting problem onto you, and a supply teacher who does not consciously set the uplift aside will reach the summer with nothing banked. Accrual keeps the money earmarked but leaves it sitting in someone else's account, and the classic withholding problem in this industry is an accrued balance that quietly evaporates when an assignment ends. If you are on the accrual model, the accrued balance should be visible to you, and it is worth photographing or saving the payslip that shows it every single pay period.

Checking your own payslip, line by line

This takes a few minutes and is the single most useful thing you can do with this guide. You need at least three consecutive payslips, because a single payslip can be distorted by a part-week or an adjustment, and a pattern across several is far more persuasive if you later need to raise it.

While you are there, check one more thing: whether rolled-up holiday pay is the right mechanism for you at all. If your bookings are a fixed timetable at one school on set days, work through the four patterns above before you conclude that a correct-looking 12.07% is correct.

A worked autumn term in pounds

The figures below are illustrative and rounded for clarity. They do not represent any real agency or umbrella company, and they are not a prediction of what you would be paid. They exist to show the shape and the scale of the money. Assume a weekly-paid day-to-day supply teacher whose gross pay for work is £130 per day, which produces a holiday pay entitlement of £130 × 0.1207 = £15.69 per day worked.

Two things are worth pulling out of that table. First, the zero weeks produce zero holiday pay, and that is correct — the entitlement is generated by work done, so a week with no bookings generates nothing. This is exactly why a term with a lot of empty weeks produces a small holiday figure, and why the rolled-up model is a poor cushion against a thin term. Second, look at what the same term would have produced under the wrong percentage: £6,110 × 0.1077 = £658.05, a shortfall of £79.43 for the term. Across three terms of comparable work, that is roughly £238 in a year — real money, invisible in any single week.

Scale it for your own day rate: at £150 gross per day the uplift is £18.11 a day, at £180 it is £21.73, and at £200 it is £24.14. Multiply by the days you expect to work in a term and you have the figure your payslips should add up to. For how those gross figures translate into money in your account after tax, National Insurance and pension, use the teacher take-home pay calculator, and see supply teacher pay explained for the full assignment-rate-to-net-pay waterfall that sits underneath all of this.

What the regulations do not say

It is worth being straight about the limits of this. SI 2023/1426 and regulation 15F are drafted in general labour-market language. They say nothing at all about supply teaching, nothing about schools, and nothing about how to characterise the particular contractual shapes the education supply industry actually uses. Everything in the four patterns section above is the application of a general test to a specific fact pattern, not a school-specific rule, and reasonable people applying the same test to the same booking can reach different answers.

The genuinely unsettled area is the middle case — the regular part-week supply teacher whose engagement is papered as a series of short bookings. Whether the unpaid weeks between those bookings sit “within the term of the contract” for the part-year definition depends entirely on how the umbrella has drafted the overarching agreement, and there is no supply-teaching authority that settles it. If you are in that position and the sums are material, that is a question for your union's casework team rather than for a website. Both the NEU and the NASUWT provide casework support to supply members and will read your actual contract, which is the only document that can answer it.

Nor do the regulations say anything about what a good outcome looks like commercially. They set a floor of 12.07% and are silent above it. An umbrella company paying exactly 12.07% is complying with the law and doing nothing more.

If the numbers are wrong

If you have worked through your payslips and the arithmetic does not come out, or the separate line is missing entirely, or you have concluded that rolled-up pay should not be applying to you at all, there is a structured route through it — from a written reconciliation request to the umbrella, through the agency, your union and the Fair Work Agency, to Acas early conciliation and ultimately an employment tribunal claim for unlawful deduction from wages. There are also time limits that are changing imminently, which makes the timing of your first step matter more than it normally would.

That whole process — what to ask for, in what order, what evidence to gather first, and what the deadlines are — is covered in detail in the companion guide: Is your umbrella company withholding your holiday pay?. Read this page for the mechanics; read that one for the remedy.