In Short
- Full-time employees working a five-day week are entitled to a minimum of 28 days (5.6 weeks) of paid annual leave per year.
- Part-time employees are entitled to the same 5.6 weeks of paid holiday, calculated pro-rata based on their working hours.
- Employers can choose to include public holidays as part of the statutory annual leave; however, this is not a legal requirement.
Tips for Businesses
Ensure accurate calculation of holiday entitlements for all employees, considering their work patterns. Maintain clear records and communicate leave policies transparently. Regularly review and update employment contracts to reflect any changes in holiday policies.
As the calendar year progresses, your employees undoubtedly look forward to their well-deserved time off. Holidays are not just a perk. They are a vital component of maintaining a healthy work-life balance and ensuring your team remains motivated and productive. However, as an employer, the responsibility of accurately calculating these entitlements falls squarely on your shoulders.
Correct holiday calculations matter both for compliance and fairness. Although the calculation rules can seem complicated, understanding them is a necessary part of effective workforce management. This article breaks down the calculation process into clear, practical steps to help you handle holiday entitlements accurately and confidently.
What are Holidays?
Holidays are a type of leave to which all employees are entitled. It is also commonly referred to as annual leave or statutory annual leave.
Full-time workers in the UK must receive the legal minimum amount of 5.6 weeks’ holiday leave, equivalent to 28 days (this can either include or exclude the 8 usual public holidays in England and Wales). For part-time or irregular-hour workers, holiday leave will accrue on a pro-rated basis based on the number of hours and days they work, though they must receive the pro-rata equivalent of the full-time entitlement. You must pay for this leave as the employer.
How Do I Calculate Holiday Entitlements?
An employee’s holiday entitlement begins to build up from the first day they start their job. Employers may, therefore, need to calculate their employees’ holiday leave entitlement for a full leave year. When the employee starts or leaves the job partway through the year, they will need to calculate the percentage due.
When calculating holiday leave entitlements for your employees, you should base the leave on the statutory annual leave year period specified in their employment contract. For example, this could be the same as the calendar year and run from 1st January to 31st December. If you have not specified the period for their leave year, you should base it on:
- the date the employee started their job, where the start date was after 1st October 1998; or
- the 1st October to 30th September, where the employee started their job before or on the 1st October 1998.
Full-Time Staff
Full-time staff, or those who work a full five-day week, receive 5.6 weeks of annual holiday leave per year. You must pay for this. Where staff are full-time but work more than a five-day week, you do not need to give them more than 28 days of annual holiday leave.
Part-Time Staff
Part-time staff should also receive 5.6 weeks of annual holiday leave entitlement per year. However, the amount they receive in practice will be less than this because their entitlement will be based on the actual number of days/hours they work per week.
Employees Working Irregular Hours
Additionally, if you employ shift workers or term-time workers, they work irregular hours, and their annual holiday entitlement is based on the hours they work. The simplest way to calculate their annual holiday leave entitlement is by using the tool described below.
The accrued holiday time is rounded to the nearest hour (down if less than 30 minutes, up if 30 minutes or more), with a maximum accrual of 28 days per year for those who are given the statutory minimum entitlement.
Carrying Over Holiday Leave
The statutory annual leave of 5.6 weeks consists of two separate elements: 4 weeks under the Working Time Regulations 1998 and 1.6 weeks under the Working Time (Amendment) Regulations 2007. Different carryover rules apply to each element.
The first 4 weeks can be carried forward when employees cannot take leave because of:
- long-term illness;
- maternity;
- paternity;
- adoption;
- shared parental leave; or
- where you have not adequately enabled them to take their entitlement.
When carried over due to illness or family-related leave, employees have 18 months from the end of the leave year to use this leave.
As an employer, you should communicate your carryover arrangements clearly, maintain proper records of why leave has been carried forward, and actively promote leave-taking within each leave year.
Continue reading this article below the formTools for Calculating Holiday Leave Entitlements
Government Calculator
The simplest way to calculate your employee’s holiday leave entitlement is to use the government’s tool. This tool allows you to calculate the employees’ leave entitlement for:
- the number of days per week that they work;
- the number of hours per week that they work;
- workers on zero-hour contracts as well as other casual or irregular hours;
- the number of hours worked annually;
- compressed hours worked; and
- the number of shifts worked.
Accrual System
During the employee’s first year of employment, you may decide to only allow employees to take leave they have accrued.
The accrual system allows employees to take one-twelfth of their annual holiday leave entitlement each month. Where an employee is entitled to the full 28 days of annual holiday leave as they work a five-day week, once they have worked for two months, they would be entitled to take 4.6 days of annual holiday leave.
Key Takeaways
As an employer, you are responsible for calculating your employees’ holiday entitlements. You must know how to do this and the rules surrounding it. This article has outlined how to calculate your employee’s holiday entitlements.
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Frequently Asked Questions
Holiday leave is annual leave for employees. The terms ‘annual leave’ and ‘statutory annual leave’ refer to the same concept.
You must allow any employees who work a five-day week 5.6 weeks of holiday leave entitlement, equivalent to 28 days. You must pay for this. For part-time employees, this is prorated. Where your staff work more than a five-day week, you do not need to give them more than the 5.6 days of annual holiday leave entitlement.
When employment ends, you must pay the employee for any accrued but untaken holiday based on their normal pay and the proportion of the leave year worked. For example, an employee who worked six months without taking leave would receive payment for 14 days.
If an employee has taken more holiday than accrued, you can deduct the overpayment from final wages if your employment contract permits such deductions.
Yes, you can refuse holiday requests for legitimate business reasons, such as operational requirements, insufficient staffing, or peak periods. However, you must have a clear holiday booking policy applied consistently to all employees.
While you can control when leave is taken, you cannot prevent employees from using their full 5.6 weeks’ statutory entitlement over the leave year. Unreasonably refusing requests could lead to legal claims.
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