How Much Holiday Are My Employees Entitled To?
Holiday entitlement sounds straightforward — until part-time hours, bank holidays, irregular workers and holiday pay enter the picture. Here’s what small employers need to know.
Holiday entitlement sounds straightforward — until part-time hours, bank holidays, irregular workers and holiday pay enter the picture. Here’s what small employers need to know.
Holiday entitlement sounds like it should be straightforward.
Someone works five days a week, they get 28 days’ holiday. Easy enough.
But what happens when someone works three days? What about irregular-hours workers? Do bank holidays have to be given on top? And how do you calculate what someone should actually be paid when they’re on holiday?
Holiday entitlement and holiday pay can quickly become a little more complicated than they first appear.
So, here’s what small employers need to know.
Almost all workers are legally entitled to 5.6 weeks’ paid holiday each year.
For someone working five days per week, this usually means:
5 days × 5.6 weeks = 28 days’ paid holiday
This is the statutory minimum. You can choose to offer more holiday as part of your employment package, but you generally can’t offer less.
Statutory holiday is also capped at 28 days. So, for example, someone working six days per week isn’t automatically entitled to 33.6 days — their statutory entitlement is still capped at 28 days.
Part-time workers are still entitled to 5.6 weeks’ paid holiday, but this will usually amount to fewer days because they work fewer days each week.
For example:
You may therefore end up with holiday entitlement that includes part of a day.
Some businesses manage holiday in hours, which can make this easier, particularly where employees work different-length days. Others choose to round holiday entitlement up to a practical amount, such as the next half or full day.
For example, a business that doesn’t operate in fractions smaller than half a day might choose to round 16.8 days up to 17 days, and 22.4 days up to 22.5 days.
The important point is that statutory holiday entitlement shouldn’t simply be rounded down if this would leave the worker with less than their legal entitlement.
This is a common misconception.
There is no automatic legal right to have bank holidays off work.
An employer can include bank holidays within an employee’s statutory 5.6 weeks of annual leave.
So, for example, you could provide a five-day-per-week employee with 20 days’ annual leave plus 8 bank holidays, giving them their statutory 28 days in total.
Alternatively, you might choose to offer 28 days plus bank holidays as an enhanced contractual benefit.
The important thing is to make the entitlement clear in the employment contract.
They won’t normally receive a full year’s entitlement.
Their holiday should be calculated based on the proportion of the leave year they are employed.
For example, if your holiday year runs from January to December and someone joins part-way through the year, their entitlement for that first year should be pro-rated.
Holiday starts accruing from the beginning of employment, so don’t forget to calculate a new starter’s entitlement and let them know what they have available.
Holiday calculations work differently for workers who meet the legal definition of an irregular-hours worker or part-year worker.
For leave years beginning on or after 1 April 2024, statutory holiday entitlement for these workers generally accrues at 12.07% of the hours worked during each pay period.
For example, if an irregular-hours worker completes 100 hours during a pay period:
100 hours × 12.07% = 12.07 hours
There are specific rules for rounding these calculations. Holiday accrued should be rounded to the nearest whole hour — less than 30 minutes is rounded down and 30 minutes or more is rounded up.
This is different from simply deciding to round a regular part-time employee’s annual entitlement up to the next half or full day.
Rolled-up holiday pay can be used, but only for certain workers.
For leave years beginning on or after 1 April 2024, employers can choose to use rolled-up holiday pay for workers who meet the legal definition of an:
It shouldn’t be used for regular-hours full-time or part-time employees simply because it makes payroll easier.
Where rolled-up holiday pay is used, the employer pays an additional amount alongside the worker’s normal pay in each pay period rather than paying holiday pay when they actually take their holiday.
For someone receiving the statutory minimum holiday entitlement, this is generally calculated as:
12.07% of the worker’s total pay for the relevant pay period
The holiday pay should be shown separately on their payslip.
It’s also important to remember that paying rolled-up holiday pay doesn’t remove the worker’s right to actually take annual leave. They still need to be able to take their holiday — the difference is simply when the holiday pay is paid.
If you’re considering introducing rolled-up holiday pay, you should also check existing contracts, as changing the way holiday pay is paid could amount to a change to an employee’s terms and conditions.
For an employee with regular hours and fixed pay, this is usually straightforward — they would normally receive the same pay while they’re on holiday as they would if they were at work.
It can become more complicated where someone’s pay varies.
For at least four weeks of statutory leave, “normal” holiday pay can include payments such as regularly paid overtime, commission and certain payments linked to professional or personal status.
The remaining 1.6 weeks of statutory entitlement can generally be paid at the employee’s basic rate.
For workers without fixed hours or pay, employers may need to look back at the previous 52 paid weeks to calculate the appropriate holiday pay.
The underlying principle is that a worker shouldn’t be financially disadvantaged simply because they take their statutory holiday.
Holiday entitlement continues to accrue while an employee is on sick leave.
There are also circumstances where an employee who couldn’t take their holiday because of sickness can carry statutory leave into a future holiday year.
Holiday continues to accrue during periods of statutory family leave too, including maternity leave.
This is an area where employers should be particularly careful before simply telling someone they’ve “lost” their unused holiday.
Sometimes.
Your employment contracts or holiday policy should explain your normal rules around carrying holiday over.
There are also situations where the law allows or requires statutory holiday to be carried forward — for example, where an employee has been unable to take it because of sickness or family-related leave.
Workers can also have rights to carry holiday forward where their employer hasn’t given them a reasonable opportunity to take it or hasn’t properly informed them that untaken leave will be lost.
So, although you might have a general “use it or lose it” rule, there are circumstances where it won’t be that simple.
When an employee leaves your business, you should calculate how much holiday they’ve accrued up to their leaving date and compare this with how much they’ve already taken.
If they have accrued statutory holiday that they haven’t used, they’ll normally need to be paid for it in their final pay.
If they’ve taken more holiday than they’ve accrued, you can’t automatically deduct the difference from their final salary. The right to make that deduction should have been agreed beforehand in writing — normally within the employment contract.
This is another reason why keeping holiday balances up to date throughout the year is important.
From 6 April 2026, employers are required to keep detailed records relating to annual leave and holiday pay for a minimum of six years.
The records need to be sufficient to demonstrate that workers have received the holiday entitlement and holiday pay they’re legally entitled to.
For a small employer, that means making sure you have reliable records of things such as:
You don’t necessarily need an expensive HR system to do this.
A well-maintained spreadsheet or other reliable system may be perfectly adequate — but informal arrangements where holidays are agreed by text message, written on a calendar or simply remembered by the manager are becoming increasingly risky.
Good record-keeping isn’t just useful for compliance. It also makes it much easier to answer the inevitable question:
“How many holidays do I have left?”
For employees with straightforward working patterns, managing holiday can be relatively simple.
Problems tend to arise when businesses have a mixture of full-time, part-time, irregular-hours or part-year workers — or when holiday records haven’t been kept particularly well.
A good starting point is to make sure:
Getting the basics right makes holiday much easier to manage — for both you and your employees.
If you’re unsure whether you’re calculating holiday correctly, or your current holiday process has become difficult to manage, Crawford Consultancy can help.
I provide practical HR, payroll and business support to small businesses across Central Scotland, including holiday calculations, contracts and policies, payroll support and putting straightforward HR processes in place.
Sometimes it’s just a case of checking you’re doing things correctly. Other times, a simple process can save a lot of headaches later.
Crawford Consultancy — practical HR, payroll and business support for small businesses.
Book a free call Get in touchThis article provides general information for employers and isn’t a substitute for advice on individual circumstances. Holiday entitlement and holiday pay calculations can vary depending on working arrangements and contractual terms.
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