Accrued annual leave

What is Accrued annual leave?

Accrued annual leave (also known as holiday pay) is where you earn holiday entitlement based on the number of hours you work. Allows an employee to be paid while taking time off from work. In this type of system, holiday pay entitlement builds up from the moment the worker begins work.

Who is entitled to Accrued annual leave?

All workers (except for casual employees) get paid annual leave.

This includes:
agency workers
workers with irregular hours
workers on zero-hours contracts

Full-time workers

Full-time worker is entitled to a minimum of 5.6 weeks, 28 paid days of annual leave. This can include the eight public holidays that individuals are entitled to in the UK.

Part-time workers

A part-time worker is entitled to receive a pro-rata amount of this leave at least 5.6 weeks’ paid holiday, but this will amount to fewer than 28 days. Simply calculate the percentage of full-time hours that a part-time employee works and apply that percentage to the 28 days.

Use the holiday entitlement calculator to work out a part-time worker’s leave.

Irregular hours

Workers working irregular hours, such zero-hours workers, are also entitled to 5.6 weeks paid holiday.
Due to the irregular working patterns each week, you may need to estimate the leave entitlement by calculating the average hours or days worked each week over a set reference period such as 12 weeks.

Additional leave above the statutory minimum

Employers can choose to award worker above this minimum allowance. For example, some employers offer an additional day of leave for every year worked.


Annual leave requests

When worker want to request annual leave, worker must give notice of at least twice the period of leave they want to take. This means that if they want to take a week of leave, they should put in their request at least two weeks before the date their leave would start.

Workers have the right to:

get paid for accrued  leave
build up (‘accrue’) holiday entitlement during maternity, paternity and adoption leave
build up holiday entitlement while off work sick
request holiday at the same time as sick leave

 Employers have the right to:

Tell workers to take annual leave on specific days, such as bank holidays or days when the business is closed. In this case, they must give the worker notice of at least twice as long as the leave they want to impose.
Impose restrictions on when leave can be taken, for example by not allowing anyone to take time off during busy periods. These restrictions should be documented in your employment policies.

What If Worker Leaves with An Accrual Deficit?

If the worker has taken more annual leave than they have accrued during the leave year, the employer can ask the employee to repay the overpaid holiday pay, or in certain circumstances can deduct the overpayment from the employee’s final salary payment.

What Worker Leaves with Holiday Still Owed to Them?

At the end of employment, any holiday that worker has accrued but has not used will be owed to them. This may mean that a business will have to make an extra monetary payment to the worker to compensate.

Carrying forward untaken leave

The Working Time Regulations 1998 do not specify that annual leave can be carried forward. This is because the purpose of the law is to ensure that workers take sufficient rest, and not taking their annual leave is not achieving this. You should aim, therefore, for workers to take all their leave within the leave year.

However, situations do arise when leave cannot be taken and if this occurs you could allow workers to carry forward their leave. Specify in your annual leave policy how long you will allow the leave to be carried forward, and specify a maximum amount of leave that you will allow to be carried forward.