Annual leave policy 

What is annual leave?

If you employ people, they’ll have the right to a minimum number of days paid holiday each year. They can use this time to go on holiday, attend an event, or just have some time to rest.

Most employers allow staff to take a maximum number of holiday days a year, but it must meet the minimum number set by the government. In recent years there’s been a trend of employers introducing an unlimited holiday policy, although it comes with added complications.

As an employer, you should have a system for requesting holiday – either an online portal or using physical holiday forms. Staff can use the annual leave planner to request time off and keep track of how much holiday they’ve taken and how much they’ve got left.

The rules on how staff can request paid time off are usually set by a company holiday policy, covering issues such as notice, carrying over holiday, and what happens when two or more members of a team want to book holiday on the same day.

Who is entitled to holiday under your annual leave policy?

There are important statutory requirements when it comes to annual leave, and you’ll need to follow these regardless of what it says in your holiday policy.

The amount of leave your employees are entitled to will depend on the number of days a week they work.

If the employee works five days a week, they’ll be entitled to at least 28 days’ paid holiday (which can include bank holidays).

If they work part time, you’ll need to multiply the number of days they work a week by 5.6 to get their holiday entitlement. For example, if they work two days a week, they’ll be entitled to 11.2 days of paid holiday.

Remember that 28 days is the statutory maximum: even if employees work more than five days a week, they’re not legally entitled to more than 28 days’ leave – unless you choose to offer more.

If you’re not sure how much holiday your staff should be entitled to, you can use Gov.UK’s holiday calculator. It’s especially useful for working out holiday allowances for staff who’ve joined part way through a year.

Carrying leave over

The annual leave policy example generally requires that all annual leave is taken in the year to which it applies.

Towards the end of the year, many employers send a letter to remind employees to book and take their holiday leave entitlement.

However, there are certain ‘exceptional circumstances’ under which employees must be allowed to carry leave over, at their discretion.

The most common of these is an extended period of incapacitation, such as not being able to work due to illness or injury.

It’s important to remember that all employees have the statutory right to accrue holiday entitlement during periods of maternity, paternity, or adoption leave.

This document has been produced by Farillio so we can’t take responsibility for its contents. We’d recommend you take professional advice before making any important decisions based on its contents.


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