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.

First published on Thursday, Aug 13, 2020

Last updated on Friday, Feb 07, 2020

4 min read

According to our BrightHR data, around 75% of businesses using our smart HR software run their holiday year from 1st January to 31st December. But there’s a lot to consider when choosing when to run your holiday year…

What are the actual holiday year start date rules?

The statutory holiday year starts on 1st April, as set out by the Organisation of Working Time Act 1997.

This means that to be compliant you should technically run your holiday year in line with this, from 1st April to 31st March.

And if you run your business’s financial year from April to March? Then having your holiday leave year running alongside it makes perfect sense, as it can make such things as writing your financial reports much more straightforward.

But lots of businesses still choose to do it another way…

So I can run my holiday year differently?

Yes. Generally speaking, as long as your employees receive their full statutory holiday entitlement, then it doesn’t really matter which holiday year you use.

If your employees receive their full holiday entitlement every year, then you’ll be able to demonstrate that they’re getting adequate rest from their jobs.

So what are the other holiday year options? 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…

Employee start date

Starting an employee’s holiday leave year on the date they started working for you can help 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…

So, what happens if I don’t set out a holiday leave year?

If you don’t do this, an employee’s annual leave year will automatically begin on 1st April (in line with the Organisation of Working Time Act 1997).

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.

Create clear company policies

Whether you decide to use the statutory holiday year, the calendar year, your employee’s start date or something else entirely, 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.

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 1800 279 841.

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