When should you start your holiday year?

Most businesses reset their annual leave in January, but are there other ways to run your holiday year? And do they make a difference? BrightHR explains.

BrightHR Team

According to our BrightHR data, around 75% of businesses using our smart HR software run their holiday year from 1st January to 31st December.

You might think this is the obvious way to manage holidays in your business, but you have more flexibility than you think…

So, what are the holiday year start date rules?

The rules are… there are no rules! But hold up, it’s not quite that simple.

When it comes to your business’s holiday year, it’s up to you, the employer, to decide when it runs. But whatever you decide, the important part is making sure you communicate this with your employees.

Details of the holiday year start date and finish date, along with your employee’s holiday entitlement, should be clearly set out in their staff contracts or another written document.

What happens if I don’t set out holiday leave year?

If you don’t do this, an employee’s annual leave year will automatically begin on one of two dates:

  • The first date the employee began working for you.
  • 1st October (the anniversary of the regulations becoming law, as set out by ACAS).

But it can be confusing trying to keep track of lots of different annual leave dates and rules—it’s much simpler to take control and set out the holiday year yourself.

So which holiday year should you choose? Let’s take a look…

The calendar year

With three quarters of businesses opting to run their holiday year from January to December, the calendar year is the most popular way to go. Why?

It’s super simple, and probably the easiest way for both you and your staff to understand and keep track of annual leave dates. But there’s a downside…

You might get a flood of holiday requests in December, with staff trying to use up their holidays before the year is out. And while you’ll get that at the end of any holiday year, this could be challenging for industries that get busier over the festive season (like the service industry) and you don’t want to leave yourself short-staffed…

The financial year

A growing number of businesses are choosing to run their holiday year in line with the financial year, which runs from April to March.

It can make writing your financial reports much more straightforward—such as including accurate holiday pay figures on your balance sheet for the new financial year.

But it’s worth taking into account when Easter falls. Because if Easter happens to fall early, you might find yourself with an influx of staff rushing to use up their holidays, when you might already have less staff in because of the Easter Bank Holidays.

Employee start date

Choosing to start each employee’s holiday leave year on the date they started working at the company can be a helpful way to stagger staff holidays, so you avoid the end-of-year holiday booking frenzy.

You also don’t need to worry about complicated calculations if a new employee joins you halfway through your holiday year. But it might be chaotic to keep track of everyone’s different start dates and holidays…

Make holiday leave a breeze

However you choose to run your business’s holiday year, our swanky staff management software automatically calculates staff holiday entitlement, and also flags any clashes when staff make holiday requests, so you won’t have too many people off at the same time.

To find out more, speak to one of our friendly HR experts today on 0800 783 2806.