How much holiday is an employee or worker entitled to?
The standard holiday entitlement in the UK is 5.6 weeks per year. This means that most workers or employees who work a standard 5-day week (eg Monday to Friday) are entitled to 5.6 weeks of holiday. This is equal to 28 days’ holiday. Holiday entitlements can be inclusive or exclusive of bank and public holidays. It is good practice for employers to set out employees’ and workers’ annual leave entitlements in an Annual leave policy.
Leave year systems and accrual systems
Employers can use a 'leave year' system or an 'accrual’ system to calculate an employee's or worker’s annual leave entitlement.
Leave year systems
A leave year is the 12-month period within which an employer’s employees and workers are expected to take a prescribed holiday entitlement. The employer’s leave year should be set out in employees’ and workers’ Employment contracts or other contracts of work and, if they have one, the employer’s Annual leave policy. If this is not set out, an employee’s or worker’s leave year will start on the day that they first started working in their job. A business’ leave year could run, for example, from 1 January to 31 December; from 6 April to 5 April; or for any other 12-month period.
An employee or worker who starts a job part-way through a leave year will only be entitled to the part of their total annual leave entitlement for that leave year that’s proportionate to how much of the leave year is left.
Employers should tell their employees and workers the dates for their leave year as soon as they start working. Employees and workers must take their paid holiday during the set leave year unless they’re allowed to carry over leave into the next year.
An accrual system is where an employee or worker becomes entitled to certain amounts of their overall holiday entitlement at various intervals, on an ongoing basis.
This can occur under the general accrual system, which applies to employees or workers who are within the first year of employment with their employer. Under this system, an employee or worker becomes entitled to one twelfth of their annual leave entitlement when they start working in their job and then one twelfth at the start of each month that they work. For example, an employee or worker who has worked for 3 months will likely be entitled to one quarter of their total leave (ie 7 days if they work a normal 5-day week).
From 1 April 2024, an accrual system must also be used to calculate holiday entitlement for irregular hours and part-year workers (this is explained in detail below).
How are holiday entitlements calculated for different types of employees and workers?
The right to paid holiday applies to full-time employees and workers as well as part-time employees and workers, agency workers, and casual workers. It’s important to calculate the exact amount of holiday a particular worker is entitled to to stay compliant with the law.
The exact amount of holiday somebody is entitled to will depend on the type of employee or worker they are.
Full-time employees and workers are entitled to 5.6 weeks (ie 28 days) of paid holiday per year if they work 5 days a week (and a number of hours that’s equivalent to full-time work).
5.6 weeks is the maximum amount of paid holiday an employer is obliged to provide in a year. If an employee or worker works more than 5 days per week, they will still only be entitled to 5.6 weeks of paid holiday a year.
An employer can choose to offer more leave than the legal minimum. An employer can also decide whether to include bank and public holidays as part of an employee or worker holiday entitlement or they may give these as extra leave days.
A shift worker’s holiday entitlement is calculated by using an average of their number of weekly fixed hours.
Regular hours part-time workers
Part-time employees and workers are entitled to paid holiday. However, they don't need to be given the full legal minimum as they work less than full-time employees or workers. Part-time employees or workers who work regular hours are given paid holiday on a pro-rata basis. This means that their holiday entitlement is calculated based on how many days or hours they work per week.
For example, if a part-time employee or worker works 4 days per week, they will be entitled to 22.4 days of paid holiday in a year. The calculation is 4 days x 5.6 weeks. Where the answer is not a round number, you should always round up to the nearest half day. For example, a worker who is working 3 days a week gets 17 days of annual leave, although the actual entitlement is 16.8 days.
It is also important to remember that part-time employees and workers should not be treated less favourably than full-time employees and workers. For example, if full-time employees are given extra days off then these must also be given to part-time employees and workers.
Irregular hours and part-year workers
Casual staff, seasonal workers (also known as workers with ‘annualised hours contracts’), and workers on Zero hours contracts may not work ‘regular hours’. They’re still entitled to holiday pay, but it’s calculated a little differently.
On 1 January 2024, The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 introduced new holiday entitlement calculation rules that will usually apply to these workers. These rules apply to both:
irregular hours workers - ie those whose number of hours worked each pay period (eg each week or each month) is either wholly or mostly variable, and
part-year workers - ie those whose contracts only require them to work part of the year and who have periods of at least one week during the year during which they’re not required to work (and for which they are not paid)
This new system will apply to leave years that start on or after 1 April 2024.
For these workers, holiday entitlement is now to be calculated as accruing at the end of each pay period. For each pay period, a worker should be allocated 12.07% of the hours worked during that pay period as holiday entitlement. This entitlement continues to accrue in an intricate, specified manner if these workers are on sick leave or statutory leave (eg maternity or adoption leave).
Pay for holiday entitlement accrued by these workers can either be:
given at the time holiday is taken - which will involve complex calculations using a formula specified in the Regulations, or
rolled up with normal pay - ie a 12.07% uplift is added to the worker’s normal pay at the end of each pay period (this must be shown separately on payslips). This method will generally be much easier for employers to manage (but keep in mind that any uplifts added to a worker’s pay during sick leave or other statutory leave will be calculated differently)
Some of these workers (eg zero hours workers) will not be obliged to work at any particular time, so they can take holiday when they choose. Therefore, the rules above essentially apply to the accrual of holiday pay rather than entitlement.
Unsure how to calculate holiday entitlement?
Working out how much holiday someone is entitled and how much they should be paid for it can be complex. You can use the government's holiday entitlement calculator to help you or you can Ask a lawyer for assistance.
Which payments are included in holiday pay calculations?
Employees and workers who take paid holiday should generally be paid the same rate that they're normally paid for their work.
Holiday entitlement is divided into 4 weeks’ ‘basic’ entitlement and 1.6 weeks’ ‘additional’ entitlement. The basic entitlement should be paid at an employee or worker’s normal rate of pay including:
most commission payments
payments related to professional or personal status (eg related to length of service, seniority, or professional qualifications), and
other payments regularly paid to the individual during the 52 weeks preceding the date on which payments are being calculated (eg overtime payments)
This ‘normal pay’ rule does not technically apply to pay for additional entitlement; for these days, the only payment due is that which is calculated by reference to the payments due to the employee or worker under their contract. However, in reality, it is often easier to calculate the full entitlement in accordance with the more generous rules applicable to the basic entitlement (ie the ‘normal pay’ rules above.
Irregular hours and part-year workers must also be paid their normal pay.