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Annual leave

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There are minimum statutory requirements in respect of annual leave. Your organisation may decide to award annual leave in excess of statutory levels.

This section outlines some key points in respect of annual leave.

Legal requirements

The Working Time Regulations provide for paid annual leave of 28 days (5.6 weeks) per year. The 28 days includes paid time off on bank /public holidays.

The above is the minimum annual leave you must provide  you may of course decide to give more annual leave than this.

At least 20 of the 28 days must be taken in the leave year to which they relate. Up to eight days may, with the employer’s agreement, be carried over to the following year, to be taken by the end of the next leave year. There is no legal right to carry over annual leave.

These entitlements are calculated on a pro-rata basis for part-time employees. For example, an employee who works for three days per week will be entitled to 17 days' statutory holiday per year (3/5 of 28 days, rounded up to the nearest day).

Setting annual leave

While voluntary organisations cannot pay the highest salaries, annual leave is an area where it may be possible to be more generous than the statutory minimum.

Consider what annual leave provision you can afford. You might want to benchmark your annual leave against the levels of leave of other similar voluntary sector organisations.

Calculating annual leave

The calculation of annual leave can be a little complicated, especially where employees work irregular hours or if they join part-way through the leave year. To assist you in the calculation, see the GOV.UK online tool. Please note that the tool calculates leave based on the statutory minimum entitlement.

Calculating holiday pay

A day’s holiday pay will normally be at the rate of the employee’s normal salary. However, there have been a number of court judgments which indicate that by law, holiday pay for the first four weeks of annual leave should include average overtime payments. For further information, see Calculating holiday pay on the Acas website. You can also call the Acas free helpline on 0300 123 1100, for guidance on your organisation’s specific circumstances.

From 6 April 2020, the reference period over which annual leave pay should be calculated for irregular hours workers will increase from 12 weeks to 52 weeks in which work was performed. See Calculating holiday pay for workers without fixed hours or pay.

Holiday pay on leaving employment

When an employee leaves your organisation, you should pay them for any annual leave earned but not taken. This is the case even if the employee is dismissed for gross misconduct.

If the employee has taken more annual leave than they have earned when employment ends, you may deduct the excess annual leave pay from their final salary. You’re advised to have a clause permitting this deduction in the written statement of terms and conditions of employment. See the written statement and contract of employment guidance.

Annual leave requests

Unless the individual’s contract of employment states otherwise, the default legal requirement is for the employee to give notice of twice as many days as the length of leave that is to be taken, in advance of the first day of leave requested. For example, if an employee requests two weeks’ annual leave, they must give four weeks’ notice prior to the first day on which the leave was due to start.

If you can’t agree to the request for leave, you must inform the employee of this a period of time in advance that is equal to the amount of leave requested. So, if two weeks is requested, you must tell the employee at least two weeks in advance if you intend to reject the request for leave.

See Holiday entitlement on GOV.UK for further information.

Annual leave policy

You’re advised to have a written annual leave policy. This should cover areas including the following:

  • Annual leave year
  • Annual leave entitlement including public holiday entitlement
  • How annual leave entitlement and public holiday entitlement is calculated for part-time workers
  • How to book leave (including an annual leave form)
  • Carrying over leave from year to year (whether it is permitted or not and if so, how much)

Further resources

Page last edited Apr 06, 2022

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