What is Zero Hours Contract? UK Definition 2026/27
Quick Answer
Employment contract with no guaranteed minimum hours of work.
Definition of Zero Hours Contract
A zero hours contract is an employment agreement where the employer does not guarantee any minimum hours. You work when needed and are paid for hours worked. You still have employment rights including NMW, holiday pay, and protection from discrimination. Tax and NI apply normally through PAYE.
Zero Hours Contract — Key Facts for 2026/27
| Guaranteed hours | None |
| Minimum wage | Applies fully |
| Holiday pay | Accrued on hours worked |
| Exclusivity clauses | Banned |
How Zero Hours Contract Works — Example
- 1Week 1: 20 hours x £12.21 = £244.20
- 2Week 2: 35 hours x £12.21 = £427.35
- 3Week 3: 0 hours = £0
- 4Tax calculated per pay period
- 5May result in variable tax deductions
How Zero Hours Contract Affects Your Tax
Zero hours workers face income uncertainty, affecting mortgages, credit, and budgeting. Tax codes on W1/M1 emergency basis are common. Keep records of all hours worked and check pay is correct.
Official HMRC Guidance on Zero Hours Contract
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
GOV.UK: Employment contractsFrequently Asked Questions about Zero Hours Contract
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.