UK zero-hours contracts give the employer flexibility to offer work as needed and the worker flexibility to accept or decline. The trade-off is unpredictable income and historically weaker protections. The Employment Rights Act 2025 will change that, but it is phasing in over several years and the headline zero-hours measures are not law yet. This guide sets out what actually applies in 2026/27 and what is still to come.
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What a zero-hours contract is
A zero-hours contract is one where the employer doesn't guarantee any minimum hours of work, and the worker isn't obliged to accept any offered shifts. Both sides have flexibility but neither side has commitments.
The arrangement is widely used in:
- Hospitality (hotels, restaurants, cafés)
- Retail (especially seasonal cover)
- Care work (domiciliary, sleep-in)
- Agriculture (harvest seasons)
- Education (supply teaching, occasional lecturing)
- Events and conference work
Many zero-hours workers have regular patterns despite the contract - e.g. consistently 25 hours/week for years, even though the contract says zero is the minimum.
Your minimum legal protections
Regardless of the "zero" hours in the contract, you have the same statutory rights as any worker:
National Minimum Wage / National Living Wage
Apply per hour worked. For 2026/27:
- £12.71/hour for workers aged 21+ (NLW)
- £10.85/hour for 18-20
- £8.00/hour for under-18 + apprentices in their first year
See our NMW guide for the full age-band table and underpayment patterns.
Holiday entitlement and pay
Statutory minimum: 5.6 weeks paid holiday per year, accrued in proportion to hours worked.
Holiday pay calculation (post-2024 rules): average earnings over the previous 52 paid weeks, including overtime / shift premiums / commission. Skip weeks of zero pay.
Two delivery routes:
- Take leave when you want it: paid at the calculated 52-week average for that period.
- Rolled-up holiday pay (re-permitted from 2024 for irregular-hours and part-year workers): an extra 12.07% on every pay packet, clearly itemised on your payslip. The employer cannot bundle this into the hourly rate.
See our holiday pay guide for the full calculation.
Statutory Sick Pay (SSP)
This is the change that matters most to zero-hours workers, and it is already in force. From 6 April 2026 the Employment Rights Act 2025 removed both the three waiting days and the Lower Earnings Limit qualifying test (GOV.UK timeline).
SSP is now payable from the first qualifying day of absence, with no minimum earnings requirement. The rate for 2026/27 is £123.25 a week, or 80% of your average weekly earnings if that is lower (HMRC). The 80% floor matters here: a zero-hours worker averaging £100 a week gets £80, where previously they would have got nothing at all.
Statutory Maternity / Paternity / Shared Parental / Adoption Pay
Apply if you meet the qualifying conditions (continuity of employment + earnings above LEL during the qualifying weeks). For zero-hours workers, qualifying-week earnings can be variable; check carefully against the relevant statutory pay rules.
Pension auto-enrolment
You're auto-enrolled if you earn over £10,000/year AND are aged 22 to State Pension age. Below £10,000/year, you can opt-in voluntarily.
For zero-hours workers, eligibility is assessed each pay period. A surge in earnings that pushes you above the per-period equivalent of £10,000/year triggers enrolment from that period onwards.
Employment Rights Act 2025 - what is in force and what is not
This is where most published advice is wrong. The headline zero-hours measures were passed in the Act but have not been commenced. Working from the government's own implementation timeline:
| Measure | Status |
|---|---|
| SSP: Lower Earnings Limit and waiting days removed | In force from 6 April 2026 |
| Day-one Paternity Leave and unpaid Parental Leave | In force from 6 April 2026 |
| Fair Work Agency established | From 7 April 2026 |
| Employment tribunal time limit raised to 6 months | From 1 October 2026 |
| Strengthened tipping law | December 2026 |
| Unfair dismissal qualifying period cut to 6 months | From 1 January 2027 |
| Right to guaranteed hours | 2027, timing to be confirmed after consultation |
| Right to reasonable notice of shifts and short-notice payments | 2027, timing to be confirmed after consultation |
Right to request guaranteed hours - not yet
When it arrives, the right will let a worker with a regular pattern of hours over a reference period ask for a contract reflecting those hours, with the employer able to refuse only on specified grounds. The detail, including the length of the reference period, is still subject to consultation. Until it is commenced, an employer is under no obligation to offer you guaranteed hours, however regular your pattern has been.
Reasonable notice of shifts and cancellation payments - not yet
The Act provides for a right to reasonable notice of shifts and a payment where a shift is cancelled, moved or curtailed at short notice. These sit in the same 2027 tranche and are not yet enforceable. If a shift is cancelled today, you have no statutory right to be paid for it unless your contract says so.
Exclusivity clauses - banned since 2015
Exclusivity clauses, meaning terms preventing you from working for other employers, have been unenforceable in zero-hours contracts since the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015. You are free to take work from other employers, and a dismissal for doing so is automatically unfair.
How tax works on zero-hours income
Zero-hours work is ordinary employment income. Standard PAYE + Class 1 NI rules apply:
- Income tax via PAYE at your tax-code rate.
- Class 1 NI at 8% above £12,570 a year, applied per pay period: £242 a week or £1,048 a month (HMRC).
- Pension contributions if auto-enrolled.
The complications come from variable hours:
Tax code on irregular earnings
Your tax code applies cumulatively. Periods with no work mean your unused Personal Allowance accumulates and can be used in busier periods - this auto-balances over the year if your code is cumulative (no W1/M1/X suffix).
Common error: a zero-hours worker who occasionally has weeks of zero earnings ends up on a non-cumulative code, which over-deducts in busier weeks. If you spot this, ask payroll to confirm your code is cumulative.
Working multiple zero-hours jobs
Multiple low-hours jobs each provide some Class 1 NI contribution but only ONE qualifying year per tax year. If your combined earnings exceed the LEL (£6,708), you have your year credited; multiple sub-LEL jobs may collectively exceed it but no single one provides the credit.
Check your NI record annually via your Personal Tax Account and pay voluntary Class 3 NI for any gap years (see our State Pension top-ups guide).
Universal Credit interaction
If you're on UC, your variable monthly earnings affect your monthly UC payment. The 55% taper rate applies above your work allowance. See our Universal Credit guide.
The "two-paydays-in-one-period" trap is especially common for zero-hours workers paid weekly or fortnightly.
Common payslip errors for zero-hours workers
- Wrong NMW rate applied (especially after a birthday triggers a higher band).
- Missing rolled-up holiday pay line when the employer claims to apply it but doesn't itemise it separately.
- Holiday pay calculated on basic hourly rate only instead of the 52-week average.
- Tax code stuck on W1/M1/X despite no recent job change.
- Pension auto-enrolment missed when earnings spike into eligibility for one period.
- Travel time between clients unpaid (relevant for domiciliary care workers - that time is working time).
- Sleep-in active hours unpaid (see our sleep-in shifts guide).
Where to escalate
| Issue | Try first | If unresolved |
|---|---|---|
| Hours worked but not paid | Payroll, in writing | Acas 0300 123 1100 |
| NMW underpayment | Payroll, in writing | HMRC NMW enforcement (up to 6 years arrears) |
| Holiday pay below 52-week average | Payroll | Acas |
| Refused request for regular hours | HR, then your union | No statutory route until the guaranteed-hours right is commenced in 2027 |
| Cancelled shift not paid | HR / your union | Check your contract; there is no statutory entitlement yet |
When to talk to a union or solicitor
For substantial unpaid wages or denied holiday pay, contact your union - UNISON, GMB, Unite or USDAW, depending on your sector - or Citizens Advice. For tribunal claims, a no-win-no-fee employment solicitor takes the bigger cases.
Disclaimer
PayslipIQ provides automated educational guidance based on the figures you supply. It is not regulated employment-law advice. Zero-hours rules continue to evolve as the Employment Rights Act 2025 provisions are commenced, and the dates in this guide are the government's published timeline rather than settled law. For unresolved disputes, consult Acas or an employment solicitor.
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Check my payslip freePayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.