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In Short
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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.
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Part-time employees are entitled to the same 5.6 weeks of paid holiday, calculated pro-rata based on their working hours.
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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.
Getting holiday calculations right is crucial for several reasons. Not only does it ensure your employees receive their fair share of time off, but it also helps you avoid potential legal pitfalls associated with underpayment. While the process may seem daunting at first, understanding the intricacies of holiday entitlements is a crucial skill for any employer. This article will guide you through the sometimes complex world of holiday calculations, breaking down the process into manageable steps to help you navigate this important aspect of workforce management with confidence.
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. You must pay for this leave as the employer.
Although the above is the statutory minimum requirement for a full-time worker, you can offer an enhanced holiday package at your sole discretion.
This factsheet outlines key developments in 2025 affecting workforce management. In particular, the proposed Employment Rights Bill (2024) will drive significant changes, anticipated to start late 2025.
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 employee’s holiday leave entitlement for a full leave year. When the employee starts or leaves the job part-way 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 the 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 annual holiday leave.
Part-Time Staff
Part-time staff should also receive 5.6 weeks 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 upon the hours they work. The simplest way to calculate their annual holiday leave entitlement is by using the tool described below.
Effective from April 2024, the Government reintroduced rolled-up holiday pay for irregular hours and part-year workers. As such, they can now accrue holidays at 12.07% of the hours they work in each pay period, with the accrual occurring on the last day of that period. This percentage is based on the statutory minimum holiday entitlement of 5.6 weeks, but employers may need to adjust it if they offer more than the minimum. 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.
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 which they work;
- the number of hours per week which 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.
It is worth noting that the above tool is only suitable if you offer 28 days of leave. If you offer more than this, your results will not be accurate.
Accrual System
During the employee’s first year of employment, you may only allow them to 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.
You can make this calculation by taking 28 days, divided by 12 months, multiplied by 2 months of work.
Key Takeaways
As an employer, you are responsible for calculating your employee’s 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.If you need help calculating your employee’s leave entitlements, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.
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.
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