Everything you need to know about:
Holiday entitlement is a vital right to rest, granted to employees, and backed by UK law.
In the UK, employers must comply with the Working Time Regulations laws regarding paid annual leave. But it’s more than that. As an HR or Payroll leader, you want to get it right so you’re doing right by your people.
We’ll help you get up to speed on everything to do with leave and give you what you need to make sure you comply with the regulations that are enshrined in law.
The UK statutory leave entitlement means that each employee has a legal right to take 28 days of paid annual leave each year (that’s based on an employee who works 5 days a week). This is also known as statutory annual leave.
The Working Time Regulations, set out in 1998, states that employees should get a minimum of 5.6 weeks of annual leave from work each year, to protect the health and safety of anyone classed as a worker. Those five-point-six weeks of annual leave works out to be 28 days if your employee works a 5-day week (which is considered “full-time” employment). For part-time workers, this is calculated on a pro-rata basis. The total number of days in the 28 days may include bank holidays.
In the UK we have between 8 – 10 days of bank holidays, depending on the country. England and Wales usually have 8, whilst Scotland and Northern Ireland have 10 hank holidays per year. All employees in the UK are entitled to a day off, or a day of annual leave in lieu of the day off.
Check out: All UK bank holidays 2024 and all Ireland bank holidays 2024.
Employers can offer their employees more than the minimum annual leave. With extra holiday entitlement, you get to have the final say on the rules. You can offer your employees any number of holidays you like, and can implement systems where they accrue with length of service. By way of example, Terry in accounting has to have worked for his organisation for a minimum of 6 months before he’s entitled to get the extra 7 days leave that they grant to all their employees. Or perhaps he gains 1 extra day per year for each year of service, up to a certain number.
In England, full time employees are entitled to a minimum of 28 days, which includes bank holidays. However, your actual holiday entitlement can depend on what is offered by your business, your contract length, your employment type, and what is offered by your business. It’s always best to speak to your HR team, or check your contract when looking for your holiday entitlement.
When it comes to annual leave, as an HR or Payroll professional you need to make sure you’re working out employees annual leave entitlement correctly. Annual leave in the UK is accrued based on how many hours an employee works, so this means that you need to look at how you’re calculating the leave.
To make annual leave a reality, employees have to give their employer written notice to request the leave. The general rule is this: the period of notice required must be twice the length of the leave requested. So, for 14 days leave, they’ll writing to ask for leave 28 days before.
Employers do have the right to refuse leave, or even cancel it. Usually, they have to have a valid reason, such as peak periods in the business. When doing so, they must provide notice equal to the number of holidays requested.
Employees should always see what their contract says when it comes to notice terms. Generally, what’s in the contract is the final word.
Casual workers in the UK are entitled to holiday pay, however, the calculations can differ based on employees hours, their contract length, and even how they’re employed your organisation. You also have options on how you offer annual leave payments to casual workers. Check out: Holiday Pay for Casual Workers.
Looking to work out your employee’s holiday entitlement? Check out our annual leave calculator.
The right to annual leave begins from a worker’s first day and builds up (or accrues) over time.
For UK holiday entitlement, as an employer, you can use an “accrual” system or a “leave year” to work out how much leave your staff should get.
A leave year is the period – set out in your contract with the employee – during which employees can take holiday. An example? Some run from 1st January to 31st December, others might follow the tax year. It’s up to the employee to take their annual leave within this period. The leave year is unaffected by other leave, such as maternity or paternity but they’ll still accrue leave over such periods.
If someone starts their job and time has already elapsed
into the leave year, they’ll only get a fraction of holiday for the year. Of course, it depends on how much of the
leave year is remaining.
The short answer: it depends. It’s worth employees checking their employee handbook to see where they stand. Usually, a maximum of 8 days can be carried over to the next year (based on a worker having 28 days’ leave).
Where employees get more than 28 days, they might be allowed to carry any unused holiday entitlement over. This needs to be clear to your people – they should be able to either check their contract, your intranet or ask the boss!
Holiday pay can be based on days or hours worked per week, zero hours contracts or irregular hours and shifts.
For those with a fixed working pattern (both full-time and part-time), holiday pay will be worked out using an employee’s usual rate of pay. If an employee works 40 hours a week and gets £450 for a week’s work, then they’ll get £450 for a week of work taken off. If the employee receives monthly payment, they’ll be paid their usual monthly amount for the months where leave has been taken.
For monthly paid workers whose pay isn’t fixed, employers will have to base the pay on the employee’s average pay over the preceding 52 weeks.
For workers who’ve been in their new job less than a year, the company should see how many full weeks they’ve been with the company for. If, for example, the employee has only been with the company for 16 weeks, the employer needs to check the average pay during those weeks in order to calculate holiday pay.
For employees who do overtime regularly, or are subject to commission, employers are obliged to include these payments in at least 4 weeks of your paid holiday. Employers have the option to include any overtime or commission payments in the entire 5.6 weeks paid leave, but they’re not obliged to.
For monthly paid workers whose pay isn’t fixed, employers will have to base the pay on the employee’s average pay over the preceding 52 weeks.
For workers who’ve been in their new job less than a year, the company should see how many full weeks they’ve been with the company for. If, for example, the employee has only been with the company for 16 weeks, the employer needs to check the average pay during those weeks in order to calculate holiday pay.
For employees on sick leave, maternity leave or paternity leave, their rights are protected. Their ability to accrue leave is unaffected.
Employees on sick leave are protected and they’ll continue to build up holiday regardless of the duration of their sickness. Unused leave can be rolled over until the following year.
It’s worth mentioning that employees can ask to use their holiday entitlement if they happen to be off work due to illness. This is an option if they don’t qualify for sick pay, but all sick pay rules will still apply.
It’s important to know that employers can’t make their people take annual leave if they’re eligible for sick leave.
An employer can refuse a holiday request for a certain period, but can’t refuse to let workers take their statutory holiday entitlement. In the case of refusal of leave, they must give notice that’s equal to the time off requested.
It’s all down to communication in this instance. If an employee falls ill on holiday, they may be able to claim sick pay instead. Employee and employer must get their heads together and decide if the time taken off will count as sickness or holiday leave, and whether the worker will get sick pay or just holiday pay.
When an employee leaves a job they must be paid out on any untaken leave they’ve built up, or repay any overtaken holiday.
Any employer must, at the very least, fulfill the statutory minimum holiday leave requirements, which is a minimum of 28 days or 5.6 weeks for full-time workers. They may offer extra leave at their own discretion, which is not subject to the same regulations as the law.
Yes, such as during Christmas and bank holidays.
Keeping track of employees’ holiday entitlement doesn’t have to give you a headache. HR software plays a key role and making the process seamless—and Cintra works with both in-house and outsourced payroll customers to make payroll and HR management easy.
Our fully-integrated HR and payroll will save you and your team precious time and effort. You can enjoy features like:
This is our bread and butter. Fancy a chat about it? We’re all ears.
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