Annual leave, often called holiday entitlement, is one of the most important rights employees have in the United Kingdom. It’s more than just time away from work; it’s an essential part of maintaining health, happiness, and productivity. A fair and transparent leave policy not only supports employee well-being but also strengthens trust between employers and staff.
Understanding how annual leave works is key for both sides. Whether you’re an employer managing schedules and compliance or an employee planning your next holiday, knowing your rights and responsibilities ensures everyone stays informed and protected.
This comprehensive guide breaks down everything you need to know about UK annual leave, from statutory entitlements and accrual rules to public holidays, carryover limits, and best practices for implementing effective leave policies.
What is Annual Leave?
UK Annual leave (or holiday leave) is paid time off work that employees are legally entitled to each year. It ensures you have time to relax, take care of personal matters, or simply recharge.
Unlike unpaid time off, Uk annual leave is paid at your regular rate, and you cannot opt out of taking it, it’s a legal right designed to protect your health and work-life balance.
| Category | Full-Time Employees | Part-Time Employees | Notes |
|---|---|---|---|
| Statutory Entitlement | 28 days (5.6 weeks) | Pro-rated based on hours/days worked | Employers can count public holidays toward this total |
| Public/Bank Holidays | Included or excluded, depending on contract | Same rules apply, proportionally | Employers are not legally required to provide these separately |
| Accrual | From the first day of employment | Also from day one | Pro-rated if an employee joins or leaves mid-year |
| Carry Over | Up to 1 year (or 2 if unable to take leave due to valid reasons) | Same | Illness or maternity/paternity leave may justify longer carryover |
| During Maternity/Sickness | Holiday continues to build | Identical rules apply | Accrued leave can be taken after returning |
| Payment for Leave | Based on usual pay, including regular extras | Same approach | Based on average pay over the last 52 paid weeks |
| Cash in Lieu | Only upon leaving the company | Same restriction | Statutory leave cannot be replaced by cash while still employed |
Statutory Leave Entitlement
Under UK employment law, full-time workers are legally entitled to a minimum of 28 days (or 5.6 weeks) of paid annual leave each year. This entitlement exists to ensure that all employees have sufficient time to rest, recover, and maintain a healthy work-life balance.
This allowance generally includes:
20 days of standard paid leave, which can be used for holidays, personal matters, or simply taking time to relax.
8 days that usually align with UK public or bank holidays, such as Christmas, New Year’s Day, and Easter Monday.
It’s important to understand that these 8 bank holidays are not automatically in addition to the 28 days. Employers have the option to:
Count them as part of the 28-day statutory entitlement, or
Offer them on top of the 28 days, giving employees a total of 36 days off each year, a benefit provided by some employers with more generous policies.
Always check your employment contract or staff handbook to confirm how your holiday entitlement is calculated and whether bank holidays are included or treated as additional leave.
How Annual Leave Accrues
In the UK, annual leave isn’t usually granted all at once; it builds up gradually as you continue working throughout the year. Accrual begins from your very first day of employment, ensuring that every hour you work contributes toward your paid time off.
For full-time employees, holiday entitlement accumulates at an approximate rate of 2.33 days per month. By the end of a full working year, this adds up to the full statutory entitlement of 28 days.
For part-time employees, annual leave is calculated proportionally based on how many days or hours are worked each week.
Example: If you work three days per week, your entitlement would be calculated as follows:
(3 ÷ 5) × 28 = 16.8 days of annual leave per year.
For casual, temporary, or zero-hours workers, holiday entitlement is usually based on 12.07% of the total hours worked. This calculation helps ensure that every worker, regardless of their schedule, receives a fair and consistent amount of paid leave.
Are Bank Holidays Automatically Included?
The UK typically observes eight bank holidays each year in England and Wales. However, these public holidays are not automatically provided as extra days off on top of your regular annual leave entitlement.
Employers can manage bank holidays in one of two ways:
Include them within your statutory 28-day allowance, meaning that if you take bank holidays off, they will count toward your total annual leave.
Offer them as additional leave, increasing your total entitlement to as many as 36 days per year, which is common in more generous or competitive employment contracts.
Important notes:
If your regular workday falls on a bank holiday, you may still be required to work, particularly in industries such as retail, healthcare, or hospitality.
If you do not normally work on that day, you are not automatically entitled to a substitute day off unless your contract specifically allows it.
It’s always best to review your employment contract or check with your HR department to confirm how your employer handles bank holidays and whether they are included in your total entitlement.
All workers in the UK are entitled to paid annual leave, no matter how many hours they work. The amount of leave you receive is adjusted to match your working pattern, ensuring that both full-time and part-time staff receive a fair entitlement.
Example for part-time work:
If you work two days a week, your annual leave would be calculated as follows:
(2 ÷ 5) × 28 = 11.2 days of paid holiday per year.
For irregular, temporary, or zero-hour workers, annual leave is usually calculated based on the total number of hours worked. The standard formula is:
Total hours worked × 12.07%
This approach ensures that every hour worked contributes to your holiday entitlement, creating fairness across different types of employment. Many employers use digital tools such as Day Off to automatically calculate and track these entitlements, helping maintain accuracy and compliance.
Holiday and Sick Leave Can Overlap
You continue to build up annual leave while you’re off sick, regardless of whether the absence is short-term or long-term. This means your holiday entitlement keeps growing even when you’re not actively working.
If you’re on sick leave but still wish to take a holiday during that time, you can request to do so and will be paid at your normal holiday rate, not sick pay.
If your illness prevents you from taking your holiday before the end of the leave year, UK law allows you to carry over any unused statutory leave into the following year. In certain cases, such as long-term sickness, you may be able to carry it forward for up to two years.
These rules are in place to protect employees from losing their legal entitlement to annual leave when health issues prevent them from taking time off.
Holiday During Maternity, Paternity, or Adoption Leave
Annual leave in the UK continues to accrue while you are on maternity, paternity, or adoption leave, exactly as it would if you were still working. Your holiday entitlement keeps building during this period, ensuring that your rights are fully protected while you take time away to care for your family.
You cannot take annual leave during your parental leave, but once you return to work, you can use the leave you’ve accumulated. Many employees come back from maternity, paternity, or adoption leave with several weeks of paid holiday available, which can make the transition back to work more gradual and manageable.
This system ensures that taking parental leave does not reduce your normal holiday entitlement and supports a fair balance between work and family life.
Can You Carry Over Unused Leave?
In most workplaces, employees are expected to take their annual leave within the same leave year. However, there are certain situations where unused holiday can be carried over into the following year.
You can carry over up to four weeks of unused statutory leave if:
You were off sick and unable to take your holiday.
You were on maternity, paternity, or adoption leave.
You were otherwise unable to take your leave for valid reasons, such as medical or personal circumstances.
Some employers may allow you to carry over more than four weeks, particularly if your contract offers holiday entitlement above the legal minimum.
It’s always best to check your employer’s policy or speak with your HR department to confirm the exact rules for carrying over leave in your workplace.
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Requesting Leave: What Are the Rules?
Employees in the UK have the right to request annual leave, but they must give their employer adequate notice before taking time off. By law, the notice period must be at least twice the length of the leave being requested. This allows employers to plan, manage workloads, and ensure that business operations continue smoothly.
Example:
If you want to take four days off, you need to give your employer at least eight days’ notice before your first day of leave. Giving more notice than required is always a good idea, especially during busy holiday seasons when many employees may also want time off.
Employers can refuse a holiday request, but only for a valid business reason, such as:
Several employees already being on leave during the same period
A particularly busy or critical time for the company, such as seasonal peaks
Staffing shortages or operational challenges that require full coverage
In addition, employers may:
Enforce company-wide shutdowns, for example, closing the business over the Christmas or New Year period. In these cases, employees may need to use part of their annual leave allowance during the closure.
Set blackout periods when taking leave is not permitted, often during essential operations such as product launches, financial audits, or major events.
It’s important to note that while employers can control when leave is taken, they cannot prevent you from using your full annual leave entitlement. Every employee must be allowed to take all their statutory holiday within the leave year, except in exceptional circumstances such as sickness or parental leave.
Holiday Pay: How Is It Calculated?
When you take annual leave in the UK, you are legally entitled to receive pay that reflects your normal earnings, not just your basic salary. The purpose of this rule is to ensure that employees are not financially disadvantaged when taking time off work.
Your holiday pay should include:
Regular overtime, if you frequently work extra hours they form a normal part of your pay.
Commission, if it is a regular element of your income, even if the amount varies from month to month.
Bonuses, if they are a consistent part of your regular pay and not one-off or discretionary payments.
Shift premiums, such as additional pay for night shifts, weekends, or unsociable hours.
For employees with irregular or variable pay, such as those who work different hours each week or whose income changes regularly, holiday pay is calculated using an average of the last 52 paid weeks. Only weeks in which you received pay are included in this calculation. This approach ensures your holiday pay reflects your typical earnings as accurately as possible.
This system is designed to protect all workers, particularly those with flexible or non-standard working patterns, by guaranteeing that taking time off does not result in lower pay or a loss of income.
Frequently Asked Questions (FAQs)
Can I be forced to take holiday at certain times?
Yes, in some cases.
Your employer can require you to take holiday at specific times, such as during a company-wide shutdown (e.g., over Christmas or during factory maintenance). This must be communicated with at least twice as much notice as the leave being enforced. For example, if you’re being asked to take 5 days off, your employer must give at least 10 days’ notice.
What happens if a bank holiday falls on a day I don’t usually work?
You may not get an alternative day off.
If your scheduled work pattern means you never work Mondays, and most bank holidays fall on Mondays, you might not benefit from bank holidays unless your contract gives you additional or substitute days off. This is especially relevant for part-time workers.
Can I cancel approved leave if my plans change?
Possibly, but it’s not guaranteed.
While you can ask to cancel or change your leave, it’s up to your employer whether to approve the change. If they’ve already made plans based on your approved absence (e.g., covering your shifts), they are within their rights to decline the cancellation.
Do I still accrue holiday while on unpaid leave or a career break?
No, not usually.
You only accrue statutory annual leave while you’re working, or on certain types of paid leave (like sick leave or parental leave). If you’re on unpaid leave or a sabbatical, holiday entitlement generally does not accumulate during that time, unless your contract states otherwise.
Can holiday leave be taken in half days or hours?
It depends on your employer’s policy.
There is no legal right to take half-days or an hourly holiday, but many employers allow it for flexibility. Check your company’s holiday policy or employee handbook to see if it’s permitted.
What happens to my holiday if I resign or am made redundant?
You will be paid for unused leave.
If you leave your job partway through the holiday year and have accrued but unused leave, you are entitled to be paid for it in your final paycheck. If you’ve taken more leave than you earned up to that point, your employer may deduct the excess from your final pay (if your contract allows this).
Can an employer force me to use annual leave during my notice period?
Yes, if they give proper notice.
An employer can require you to take some or all of your remaining holiday during your notice period, as long as they provide double the notice of the length of leave being required.
Can I take unpaid leave instead of a paid holiday?
Not usually.
Employers can refuse unpaid leave requests if you still have paid holiday remaining. They are legally required to encourage you to use your statutory holiday first. Unpaid leave is usually granted at the employer’s discretion and is not a substitute for paid annual leave.
Conclusion
Understanding your UK annual leave rights is essential for maintaining a healthy work-life balance and ensuring you receive the time off you’re entitled to. Whether you’re full-time, part-time, or on a flexible contract, the law provides clear protections to ensure fair holiday pay, accurate accrual, and equal access to rest periods. Always review your employment contract and consult HR to clarify specific terms, especially around bank holidays, carry-over, or leave during sickness or parental absences. Staying informed helps you make the most of your entitlements and supports your overall well-being at work.