Annual Leave Entitlement

All employees are legally entitled to annual leave. As an employer, you must ensure you’re aware of the annual leave entitlements and policies that are in place in the UK.

In this guide, we’ll cover what annual leave is, how much of it employees are legally entitled to and things to include in your annual leave policy.

What is annual leave?

Annual leave is paid time-off provided to staff. Employees build up—or accrue—holidays as they work. You must provide annual leave to all employees whether they are:

• A full-time or part-time employee.
• A full-time or part-time worker.
• On a zero-hours contract.
• Agency workers.
• Staff with irregular hours.

What is the minimum annual leave entitlement?

The minimum holiday entitlement in the UK is 5.6 weeks of paid annual leave per year. For employees working five days a week, this equates to around 28 days holiday.

This is also known as the statutory annual leave allowance. You can choose to include bank holidays in this number or provide them as additional days leave. But employees must receive the minimum holiday allowance over the year.

There are limits to statutory annual leave. The leave entitlement full time employees are legally required to receive is 28 days. If employees are working more than five days a week, they aren't entitled to any more leave—unless the employer offers it.

Part-time workers

Part-time workers are also entitled to 5.6 weeks of statutory annual leave. But because they work fewer hours each week, this will equate to fewer days holiday in the year.

To work this out, you’ll need to multiply the number of days worked a week by 5.6 (e.g. 2 x 5.6 = 11.2 days holiday each year).

The UK government leave entitlement calculator can work out these sums for you.

Additional holiday allowance

Employers can offer additional holiday allowance in the UK beyond the minimum 5.6 weeks leave.

This extra leave isn’t subject to the same rules as statutory leave. For example, an employer can choose to offer additional days of leave to employees who've worked for the company for several years.

Different types of leave entitlement

There are two different ways you can work out how much leave employees will get. You can use either:

• A leave year: This is the date that employees holidays begin and end. Employees can use their annual leave entitlement within this time frame. For example, your workplace leave year may run from 1st January to 31st December. You must inform new employees of the dates of the leave year as soon as they start working.
• An accrual system: In this system, employees build up a holiday allowance each month as they work. Employees get one-twelfth of their annual holiday entitlement (5.6 weeks a year), for each month they work.

Typically, employers only use an accrual system for the first year of employment. Otherwise this approach makes it difficult for staff to take time off in the first few months of the leave year.

Can employees carry over annual leave?

Employees have a statutory right to carry over some of their annual leave entitlement in the UK.

Employees who receive 28 days leave can carry over a maximum of eight days leave. If employees receive more than 28 days leave, it’s up to their employer whether they can carry them over.

You should confirm how many days leave an employee can carry over in the contract set out at the start of employment.

There are exceptions to this. If an employee can’t take their annual leave entitlement because they are on parental or sick leave, you must allow them to carry over a maximum of 20 days of their leave into the next leave year.

Statutory holiday entitlement in the UK is not affected by maternity, paternity or adoption leave. Employees will continue to accrue their holidays as normal during this period.

Statutory leave pay

You must pay employees their normal rate of pay when they’re on annual leave. For every week of statutory leave, employees should receive a week’s worth of pay.

This can be different whether the employee is full-time, part-time or a shift worker. Here's how you can work out the weekly wages:

• Fixed hours and pay: In this instance, the employee will receive a week’s wage.
• Fixed hours shift workers (full & part-time): To calculate this, you’ll need to look back at the average rate of pay over the employees past 52 weeks of work. If they didn’t get paid one week, you can discount this week and go back another week into their employment. Then take the average weekly pay for the employee.
• No fixed hours (casual working, zero-hours contracts): For these contracts, you’ll need to look back over the past 52 paid working weeks for the employee. Then take the average weekly pay.
• Monthly Pay: Work out the weekly rate of pay by dividing the monthly payment by the number of hours worked that month. Then, multiply this number by the employee’s total weekly hours. You’ll need to complete this for the past 52 weeks of work.

If an employee hasn’t been working at the organisation for 52 weeks, make the calculations based on their total previous weeks of work.

Creating an annual leave policy

Different regulations affect annual leave entitlements in the UK. Make sure that you’re keeping to your responsibility as an employer. Failure to do so can lead to disputes from employees, employment tribunals and costly fines.

It’s a good idea to implement an annual leave policy in your workplace. Here are some key points that should be included:

• The company leave year dates or accrual system information.
• Annual leave entitlement.
• Procedure for requesting leave.
• Carrying over annual leave.
• Additional leave entitlement.

Get help with leave entitlement from Health Assured

If you’re still unsure on how much leave employees should receive, or you’ve any concerns around specific employee queries, Health Assured can help.

Our team of legal advisors and experts are well equipped to support employers with questions and advice. The helpline is open 24/7 hours a day 365 days a year. So you can get in touch whenever you need us.

For guidance on leave entitlement, contact us today. Or arrange a call back from a workplace wellbeing expert today on 0844 891 0353.