Holiday Allowances

The annual statutory holiday entitlement in the UK is 5.6 weeks. This figure is the same for all employees regardless of their contract type or the number of hours they work.
  • Author: Siva
  • Last updated: April 5, 2022
  • 5 Minutes
holiday allowance in UK explained by Papershift

Everybody needs a holiday from time to time. But to take a holiday, most employees will need to use up some of their holiday allowance.

But what exactly is a holiday allowance and how do employers manage their employees’ leave entitlement?

Read on to find out more.

What Is the Statutory Holiday Entitlement in the UK?

The annual statutory holiday entitlement in the UK is 5.6 weeks. This figure is the same for all employees regardless of their contract type or the number of hours they work. The actual number of days an employee will receive will vary depending on the number of hours they work. 

Is Statutory Holiday Entitlement Set Out in Law?

In short, yes, it is. Statutory holiday entitlement is set out in legislation in the Working Time Regulations 1998. These regulations state that all workers except those self-employed have an entitlement to paid annual leave. These rules say that employees have a right to:

  1. Receive pay for holiday leave.
  2. Build up holiday entitlement during maternity, paternity, and adoption leave.
  3. Build up holiday entitlement while absent from work because of sickness.
  4. Request holiday whilst absent from work because of sickness.

How Many Days is 5.6 Weeks for a Full-Time Employee?

5.6 weeks generally works out as 28 days holiday entitlement for a full-time employee who works 5 days a week. This is often split into:

  • 20 days leave to be taken any time of the year. This equates to 4 weeks off for a full-time employee.
  • 8 days leave for statutory holidays and bank holidays. This is to cover days like Christmas and Easter

An employer can never offer less than this entitlement but may offer more if they want.

Do You Have to Take 8 Statutory Days Leave?

There is no legal requirement for an employer to force their staff to use holiday entitlement to cover the 8 statutory bank holidays. They can instead allow them to use these elsewhere in the year if they wish. If this is the case, details of how this is administered will be set out in the employee’s terms of contract.

What are the Bank Holidays in the UK?

The bank holidays in the UK are:

  • New Year’s Day (January 1st)
  • Good Friday.
  • Easter Monday.
  • Early May Bank Holiday.
  • Spring Bank Holiday.
  • Summer Bank Holiday.
  • Christmas Day (December 25th)
  • Boxing Day (December 26th)

Sometimes a bank holiday, like Christmas, will fall on a weekend. In this event, the bank holiday will move to the next working day.

Do All Employees Have an Entitlement to Holiday Allowance?

The short answer is yes, all employees have a right to receive a holiday allowance regardless of their contract. This includes:

The way employers work out entitlement in each case may differ. But they must adhere to the statutory guidelines set out by the government.

What Is Holiday Pay?

Holiday pay is money an employee receives when they are away from work on annual leave. This should be no less than their normal wage for the period of absence.

Will I Receive Holiday Pay for Bank Holidays?

If an employee works for a business that does not open on a bank holiday, then yes, they will receive pay. If an employer requires an employee to work a bank holiday, they will receive standard pay and an extra day’s holiday allowance to take elsewhere in the year.

How Do Employers Calculate Holiday Allowance?

This often depends on the type of contract the employee has and the number of days/hours they work. 

Fixed Shift Workers

Workers who work regular fixed length hours each day will have their holiday calculated in days. This can also apply to shift workers so long as their shifts are the same length. This is the most straightforward calculation.

These employees will receive the correct number of days to cover 5.6 weeks work. For a full-time employee working 5 days a week this will be 28 days.

Varying Shift Patterns

If a worker works a fixed number of hours each week but not the same number of hours each day, the calculation for holiday allowance becomes complicated. Sometimes, the average shift length may be used to calculate the number of hours given as leave. Some employers may use the total number of hours an employee is expected to work in a year to calculate how many hours leave they should have.

How Does an Employer Manage Holiday Allowance?

There are many ways to manage annual leave as an employer, with no right or wrong way of doing it so long as they adhere to all statutory requirements. Most businesses set out how they manage holiday allowance in their annual leave policy.

What Should an Annual Leave Policy Include?

An Annual Leave Policy will often include the following:

  • Details of those eligible for holiday allowance and holiday pay.
  • Any staff requirements to work during bank holidays.
  • Rates of pay for staff. These should be no less than the employees’ normal pay rate but may be higher.
  • Details of how casual, flexible, and part-time staff will be paid.

It’s important that any policy must be fairly administered to all staff

Can an Employer ‘Force’ Me to Take Holiday Allowance?

Yes, they can. This is generally the case with bank holidays. But there may be other situations where an employer may force an employee to take their holiday allowance. The most common example is where an employee has not taken their full entitlement and the end of the year is getting close.

What is the Minimum Notice for Taking Holiday Allowance?

This can depend on the employer and their policies. Generally speaking, many employers enforce a notice period that is at least twice as long as the amount of holiday taken. For example, 7 days’ holiday would require 14 days’ notice.

Can An Employer Refuse to Let Me Take My Holiday Allowance?

Yes, they can. Your employer can refuse to let you take leave so long as they have a valid reason. They will normally set the reasons for refusal out in the annual leave policy. Reasons for refusal can include:

  • Busy times of the year. Businesses may refuse leave requests at busy times.
  • Insufficient notice given. Employers can refuse annual leave requests if the request is too close to leave period in question.
  • Staff shortages. 
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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)