Getting holiday entitlement right matters, both for keeping staff happy and for staying on the right side of the law. The rules are fairly simple for standard full-time staff, but they get more complicated for part-time or irregular workers.
Here's what you need to know to calculate and manage holiday entitlement correctly.
The legal minimum
Almost all workers in the UK are legally entitled to 5.6 weeks of paid holiday a year. For someone working five days a week, that works out to 28 days, and this can include bank holidays if your contract says so. This is a minimum, and you're free to offer more as part of your benefits package if you choose.
Calculating entitlement for part-time and irregular staff
For part-time staff working set days, entitlement is calculated on a pro-rata basis. Someone working three days a week is entitled to 5.6 weeks of their normal working pattern, which comes to 16.8 days. For staff with irregular hours, such as casual or zero-hours workers, entitlement is usually calculated as a percentage of hours worked, currently set at 12.07 percent, though it's worth checking gov.uk for the latest calculation method, since rules in this area have changed in recent years.
Managing requests fairly
A clear, consistent approach to holiday requests avoids disputes and rota headaches. A few things worth putting in place:
• A clear notice period for requesting time off, stated in your handbook or contract
• A fair system for deciding who gets priority during busy periods like school holidays
• A simple way to track entitlement used and remaining for each employee
• Clear rules on how much unused holiday can be carried over into the next year
Handling holiday pay correctly
Holiday pay should reflect normal pay, including regular overtime and commission in many cases, not just basic salary. Getting this wrong is one of the most common holiday-related errors small businesses make, and it can lead to claims for unpaid holiday pay going back further than you might expect. If your staff regularly work overtime or earn commission, it's worth checking exactly how their holiday pay should be calculated to avoid underpaying them.
Frequently asked questions
Do bank holidays count towards statutory holiday entitlement?
They can, but only if your contract says so. There's no automatic legal right to bank holidays off in addition to the statutory 5.6 weeks, so check what your contracts state.
Can staff carry over unused holiday to the next year?
This depends on your policy and contract terms. Some carryover is required in specific circumstances, such as long-term sickness, but general carryover is usually up to your business's own rules.
How is holiday entitlement calculated for zero-hours workers?
It's usually based on a percentage of hours actually worked, since their hours vary week to week. Check gov.uk for the current calculation method, as this has changed in recent years.
