Employee annual leave

Work hard, play hard. It's not just a phrase

It’s generally agreed that a healthy balance between work and time off is essential for a healthy and happy workforce.
Your organisation also has legal obligations to provide paid holiday entitlement. The challenge for your organisation is to decide how much annual leave you can provide beyond the minimum — and to manage employees’ time off effectively.

Working out annual leave entitlement

Every UK employee is entitled to a minimum of 5.6 weeks of annual leave per year. For full-time workers this means 28 days, while part-time workers take holiday on a pro-rata basis. For example, an employee working 3 days a week (also called 0.6FTE) would have 5.6 weeks x 3 days = 16.8 days of paid holiday.

When it comes to public holidays, your organisation can decide which ones to include. At some companies, full-time employees must take Bank Holidays and Christmas as part of their 28 days’ annual leave. Others require more flexibility in how workers take their holidays. Your policy will depend on the needs of your organisation.

Annual Leave Calculations

The UK government website provides a quick way to calculate annual leave entitlement using an online calculator. You only need a few basic details to use it, such as employment start date, hours worked per week and where you are currently in the leave year.
The calculator will give you an exact entitlement, and outlines the employer’s obligations for the details you enter. For example:

Alison starts at a new job on 1st May, working 3 days per week. The leave year began on January 1st. The calculator quickly tells us that she is entitled to 11.3 days of holiday before the year’s up.

Keeping Track of Holiday Time

Employees will often track how much leave they’re using, but it’s a good idea for your organisation to record all annual leave for planning and compliance purposes.

There are several ways you can track employee holiday, with options to suit organisations of different sizes.

  • Create your own spreadsheet. For smaller companies, creating a dedicated spreadsheet or calendar might be the simplest way to track holiday. You can download templates for these online.
  • Use a web app. Users can sign up for a free account and keep it simple, or pay monthly for an account with more features. Either way, the initial work is done and there are different types of template to choose from.
  • Use a company HR software with an integrated holiday management system. For larger organisations, it can pay to have a comprehensive overview of staff leave, with tools and support to make managing absence easy.

Carrying Over or Paying for Unused Annual Leave

Despite the best of intentions, a fast-paced year can sometimes present little opportunity to take a break.

If an employee doesn’t use all of their annual leave entitlement, they usually have a right to ‘carry time over’ to the next leave year, or to claim pay instead of annual leave. Employee rights at your organisation will depend.

Frequently Asked Questions about Annual Leave

Our clients ask loads of questions about annual leave, so we’ve answered some of the most common ones below.

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How is annual leave calculated?

Every UK employee is entitled to a minimum of 5.6 weeks of annual leave per year.

For staff with a five-day working week, 5.6 weeks is equal to 28 days. Part-time workers get the same 5.6 weeks annual leave, but they will be entitled to less days off.

The basic calculation for holiday entitlement is: The number of days in a work week multiplied by 5.6.

For example, someone who works three days a week would be entitled to 16.8 days of annual leave (3 x 5.6).

Can an employer dictate when you take your holidays?

Yes. You can tell an employee when to take their holidays, and they normally can’t refuse.

You need to provide your staff with two days’ notice for every day off. So, if you tell an employee to take a full five-day week, you need to give ten days’ notice.

Although you can dictate staff holidays, it’s very uncommon. Instead, most businesses set rules about when staff can take leave in employee handbooks.

Do you get paid for annual leave?

Yes. Employees are entitled to their normal wages whilst on annual leave.

Shift workers and people who work irregular hours are paid their average weekly pay. Take their average hours and pay over the last 52 weeks to calculate their average weekly pay.

If they’ve used all their statutory holiday entitlement, they can request additional unpaid leave from you. But you are under no obligation to accept unpaid leave requests.

Read our holiday pay guide to learn more.

How do you calculate annual leave accrual?

Annual leave is accrued throughout the leave year. This prevents new employees from using a full years’ leave entitlement and leaving the company before it’s been earned.

To calculate accrued annual leave, divide your annual holiday allowance by the leave period. For example, 28 (the annual leave allowance) divided by 52 (weeks in a year) equals 0.54 (weekly annual leave accrual).

How much holiday do you accrue per month?

The amount of holiday accrued each month depends on your total annual leave allowance.

To work out your monthly holiday accrual, divide your annual leave allowance by twelve.

Full time employees, with a standard statutory entitlement of 28 days, will accrue 2.33 days each month.

Does 28 days holiday include bank holidays?

It’s up to the employer to decide whether to include public holidays in the annual leave allowance or provide them separately.

Some businesses close on bank holidays, and make employees take them as part of their annual leave. Others give staff the time off on top of their leave entitlement.

Your annual leave policy should include details of whether bank holidays are included.

What is the average holiday entitlement in the UK?

Most UK employees are entitled to 5.6 weeks annual leave each year. For full time employees that means 28 days of paid annual leave each year.

How do you calculate pro-rata annual leave?

Pro-rata annual leave is used to calculate the leave entitlement for part-time workers.

If a part-time employee works fixed hours, you can calculate their pro-rata annual leave by multiplying the number of days they work each week by 5.6.

For example, a pro-rata employee who works three days a week will be entitled to 16.8 (3 x 5.6) days leave.

For workers with irregular hours, you first need to work out their average working week. Take their average hours and pay over the last 52 weeks to calculate their average weekly pay.

Once you have that figure, multiply it by 5.6 to work out their annual leave entitlement.

Is annual leave the same as holiday?

Yes. Annual leave entitlement is also known as holiday entitlement.

Annual leave can be used for many reasons, but most commonly is used when employees need a break or want to go on holiday.

How long after starting a job can you take holiday?

In the first year of a new job, an employer can require staff to work enough days to build up their holiday entitlement.

For example, after being in a job for one month, staff may be limited to only taking one twelfth of their annual leave.

It’s up to the employer to decide whether they put this rule in place for new starters. Details of any rules like this should be covered in the annual leave policy and employee handbook.

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