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Annualised hours

Annualised hours allow staff to work a set number of hours over a year, rather than weekly. The flexibility of when the hours are worked can help meet peaks and troughs in service demand or support staff in managing commitments outside of work.


Annualised hours:

  • provide more flexibility in working hours than a standard contract but include a commitment to a minimum number of overall hours (unlike a zero-hour contract)
  • can help support staff who have caring responsibilities. Parents and/or carers can choose to work more hours during term time and less during school holidays, while still covering their hours for the year
  • can enable a department to meet variations in service demand across the year and help to reduce reliance on agency or temporary staff

Points to consider

  • Does the role have peaks and troughs in demand throughout the year? This would lend itself to annualised hours without an adverse effect on service delivery
  • Can the service accommodate or adapt to periods of absence or reduced hours? What is the maximum period of absence the department could permit?
  • How will the department maintain engagement with a member of staff if they are away for prolonged periods of time?

Working hours and patterns

Annualised hours contracts require agreement between the staff member and line manager on how hours will be worked across the year.

There are two options for annualised hours:

  1. Agreed working patterns: hours are agreed for the full year and the working pattern for each month. For example, a member of staff works only during school holidays to cover leave arrangements
  2. Core hours with flexibility included: hours could be worked with flexibility by having a 'core' or 'rostered' basis for set hours and the remaining hours 'un-rostered' or a short notice basis to meet changes in service demand

It is important to ensure that working hours remain compliant with the working time regulations:

  • Limit of an average of 48 hours a week over a 17-week period
  • Right to 11 hours rest a day
  • Right to a day off each week
  • Right to an in-work rest break if the working day is longer than six hours


Staff are paid in equal monthly instalments throughout the year based on the total number of annual hours.

If staff do not work full-time hours, salary and all pay related benefits are reduced pro-rata to hours worked (e.g. pay awards, salary increases, death in-service benefits, NHS Pension Scheme, redundancy pay, annual leave, sick pay and maternity pay).

Before agreeing a request

  • Review the service delivery, are there peaks and troughs throughout the year and when are these? Could an annualised hours contract help to meet these demands
  • How will the hours be worked throughout the year (e.g. agreed working patterns or core hours with flexibility included)?
  • Identify how staff will record the hours that they worked or are owed and how regularly this need to be reviewed. Working time directives still need to be adhered to in relation to the maximum number of hours worked in a week

Where flexible hours are agreed consider:

  • if a staff member needs to be called in during non-core hours, it will need to be agreed how this will be done and what notice will be given. In addition, it should be outlined if a member of staff can refuse and/or if there are potential consequences for persistent refusals.
  • what are the core hours to be worked each week or month and how will the flexible hours work?

After agreeing a request

  • Working hours should be recorded on a weekly basis and monitored monthly to ensure that at year end, the member of staff is on track to have worked the annual contracted hours
  • Regularly review wellbeing and monitor workloads, objectives and targets should be adjusted to ensure regular communication and checking in takes place
  • Team meetings should be reviewed and held on days when everyone is available. If there is not an option for everyone to attend team meetings, consider rotating the meeting days or times so different team members can be present. There should also be process to follow up with staff members who are unable to attend to ensure information is shared and discussed (i.e. via email, one-to-one meeting or an online space for sharing).
  • Wellbeing support services should be shared with staff regularly and staff encouraged to make use of them in the same way as full-time colleagues
  • The working pattern should be reviewed at least every 12 months to ensure it is beneficial for the needs of the service and the member of staff


To convert weekly contracted hours to annualised hours multiply by 52.143. This is the number of hours the employee will be paid for the year.

We will calculate the amount of annual leave and bank holiday entitlement. We deduct the amount from the annualised hours to get the number of working hours over the year.

Contracted hours should not be exceeded or underworked over the 12-month period. We pay the salary in 12 equal payments, irrespective of the number of hours worked that month.

Where employment is terminated part way through a year, by either side, the manager will calculate any over or underworked hours. The number of weeks worked that year is multiplied by 37.5 hours (for full time employees), and we deduct the number of hours worked.

We will pay employees any hours owed at the standard hourly rate. Hours owing by the employee will be deducted based on the standard hourly rate.

Annualised hours conversion example

A - Standard weekly hours: 37.5
Total annual hours: 37.5 × 52.143 = 1,955.4 hours

B - Annual leave entitlement: 27 days
Bank holidays: 8 days
Total leave entitlement: 35 days
Total leave in hours: 35 × 7.5 = 262.5 hours

Annual working hours: A − B = 1,692.9 hours

This employee will be paid for 1,955.4 hours per year but their working hours for the year will be 1,692.9 hours. The difference between the two is the annual leave and bank holiday entitlement.

How the 1694.6 hours are worked over the year is dependent on the needs of the service. The monthly salary is the annual salary divided by 12, irrespective of the actual hours worked in a month.

Managers must ensure that employees take the time off which they are entitled to. In this case it is 262.5 hours. Employees should discuss with their manager when they would like to take this time.

Practical tips

Annualised hours working patterns need to be set on SMART/Allocate. The member of staff will show as having TOIL each week during working weeks. This is because they will be working for a higher number of hours than they are being paid for (e.g. working 25 hours per week but being paid for 21.62 hours). However, they do not actually accrue this TOIL as these hours are built into the calculations.

For further support on recording hours accurately please contact the e-rostering team.

Top tip

Annualised hours can be a helpful way to cover periods of the year when staffing levels are reduced (e.g. numerous staff regularly requesting time off during the school holidays). An annualised contract could be utilised to provided cover during these periods to enable the needs of the service to still be met.

Staff can also be recruited on an annualised contract to work more hours during winter pressure months to help with demand and then less hours the rest of the year.

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