Employee annual leave entitlements

If you want to make sure your employment contracts aren’t illegal, you need to know the statutory minimum annual leave allowance for employees.

But that really is the ‘minimum’ you need to know. If you want to compete for talent with rival companies, you’ll also need to know typical annual leave allowances — so you’re offering can match others in your field.

Minimum holiday entitlements

Most workers are entitled to 5.6 weeks or 28 days of paid annual leave or statutory leave allowance, inclusive of the UK’s eight bank holidays. That’s a pro rata allowance: employees who work full time should get all 28 days, while an employee who works half-hours would get 14 days, and so on.

For employees who work irregular hours, you can use the government’s holiday entitlement calculator.

Note that the minimum statutory leave allowance is also a limit. An employee who works six days is still only entitled to 5.6 weeks of statutory leave per year. However, you can still offer them more holidays through a separate company policy.

Typical holiday rights & allowances

Many organisations offer more annual leave than the statutory requirement. Additional paid leave can help you to match job market expectations and retain employees.

Two thirds (66%) of organisations offer at least 25 days of paid annual leave, excluding bank holidays. The percentage of companies offering this additional leave varies by sector. In 2014, at least 25 days of paid leave was offered by:

• 56% of private sector firms
• 83% of public sector organisations
• 71% of voluntary, community and not-for-profit organisations (source: CIPD 2015)

A breakdown of the facts surrounding holiday entitlement are:

• You are entitled to a minimum of 5.6 weeks paid annual leave (28 days for someone working five days a week)
• If you are working part-time, are entitled to the same level of holiday pro rata, currently, this is 5.6 times your usual working week
• Holiday begins to build up as soon as you start work
• You receive your normal salary when you are on annual leave
• When you are leaving employment, you receive payment in lieu of annual leave not taken
• Bank and public holidays can be included in your minimum entitlement
• you continue to be entitled to your holiday leave throughout your ordinary and additional maternity leave and paternity and adoption leave

Linking annual leave to length of service

A popular talent retention method is to link contractual annual leave allowance with employees’ length of service. Again, the details of such schemes vary by sector. Some add a day of annual leave per year of service, up to a maximum of eight additional days. Others may offer one additional day after three years of service.

Your policy should be designed to compete within your own sector, within the limits of your company resources.

Paid leave for bereavement

Around 80% of organisations also offer employees paid leave in cases of family bereavement.

The difference between statutory and company leave

Remember how there’s a 5.6-week limit on statutory leave, even though your company can still offer more? That’s because the rules for handling statutory leave are different than for contractual leave.

For statutory leave, employees are entitled to:

• Build up annual leave during maternity leave and while on sick leave
• Receive payment in lieu of annual leave only when leaving their job
• Carry over up to 20 days of their annual leave to the following year, if they couldn’t take it because they were off sick

For contractual holiday allowances, you can set your own rules on accrual and payment in lieu. Your employment contracts can also set rules on carrying over leave not taken for reasons besides sick leave.