How much holiday are your staff actually entitled to?

Holiday entitlement is one of those things every small employer assumes they've got right, usually because they copied it from a contract template or from whatever their last employer did. It's also one of the most common sources of genuine disagreement with staff — not because anyone's acting in bad faith, but because the rules are less obvious than they look, particularly the moment you have part-timers, casual staff or someone leaving mid-year.

Here's the plain-English version of what a UK employer actually owes.

The baseline: 5.6 weeks

Almost all workers in the UK are entitled to 5.6 weeks of paid holiday a year. The word doing the work there is *weeks*, not days — because entitlement is defined in weeks, it scales naturally to whatever pattern someone works.

For someone working five days a week, 5.6 weeks is 28 days. That's where the familiar '28 days including bank holidays' figure comes from. There's a statutory cap, so someone working six days a week is still entitled to 28 days rather than 33.6. And it's a minimum, not a target — you can always offer more, and plenty of small employers do because it's one of the cheapest ways to be a genuinely attractive place to work.

Bank holidays are not automatically on top

This is the single biggest misunderstanding. There is no automatic legal right to paid time off on a bank holiday. An employer can include the eight usual bank holidays within the 5.6 weeks, which is exactly what '28 days including bank holidays' means, leaving 20 days of discretionary leave.

What matters is that the contract says clearly which arrangement you're using. 'Twenty-eight days including bank holidays' and 'twenty days plus bank holidays' are very different offers, and the gap between what a new starter assumed and what the contract says is where the argument happens. Spell it out in the written employment contract rather than leaving it to be inferred.

Almost every holiday dispute in a small business traces back to a contract that said something slightly vaguer than what both sides thought it said.

Part-timers get the same 5.6 weeks, pro rata

A part-timer isn't entitled to less holiday — they're entitled to the same 5.6 weeks, which simply amounts to fewer days because their week is shorter. Someone working three days a week gets 5.6 × 3, or 16.8 days.

The complication with part-timers is bank holidays. If your business closes on bank holidays and someone happens to work Mondays, they lose more of their entitlement to bank-holiday closures than a colleague who works Wednesdays and Thursdays. The standard fix is to express everyone's entitlement in hours and deduct actual hours taken, which makes the arithmetic fair and visible for everyone regardless of which days they work.

Irregular hours, casual and part-year staff

This is where employers most often get it wrong, and where the rules have moved in recent years. For irregular-hours and part-year workers — think casual bar staff, seasonal retail, term-time-only roles — holiday for leave years starting on or after 1 April 2024 can be accrued at 12.07% of the hours worked in each pay period, and employers have the option of paying rolled-up holiday pay as an uplift on each payslip rather than paying it when leave is taken.

Two practical points. If you use rolled-up holiday pay, it must be itemised separately on the payslip — not quietly folded into the hourly rate, which is exactly the practice the rules were tightened to stop. And rolled-up pay doesn't remove the right to actually take the time off; staff are still entitled to the leave itself. These rules came in through the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 and have applied to leave years starting on or after 1 April 2024. Acas publishes worked guidance for irregular-hours and part-year workers — design your approach against it at the outset rather than unpicking it later.

Carry-over, and what happens when someone leaves

The general position is that statutory holiday should be taken in the leave year it relates to. There are specific circumstances where leave can or must be carried over — long-term sickness and family leave among them — but 'we were too busy' isn't one of them by default, and an employer who repeatedly refuses leave requests then declines to carry it over is heading for a dispute.

When someone leaves, you must pay them for any statutory holiday they've accrued but not taken. Get the calculation right: it's based on their entitlement accrued up to the leaving date, not on a whole year's allowance. The reverse situation — someone who has taken more leave than they'd accrued — can only be deducted from final pay if the contract explicitly allows it, which is a good reason to check that your template does.

A worked example: three people, one leave year

The arithmetic is easier to trust when you watch it done. Take a business with a leave year running from 1 January, closing on all eight of the usual England and Wales bank holidays, on a contract that says 28 days including bank holidays.

The full-timer works five days a week. 5.6 weeks × 5 days is 28 days. Eight of those go on the bank-holiday closures, leaving 20 days they choose themselves. No surprises there.

The part-timer works Monday, Tuesday and Wednesday, 7.5 hours a day. 5.6 × 3 is 16.8 days — but express it in hours and the fairness problem becomes visible. Their week is 22.5 hours, so 5.6 weeks is 126 hours a year. Four of the eight bank holidays always fall on a Monday, so if six closures land on their working days that's 45 hours gone at 7.5 hours each, leaving 81 hours — 10.8 days — to book themselves. A colleague on the identical three-day contract working Wednesday to Friday might lose only two or three closures. Same entitlement, very different experience, and an hours-based ledger is what lets you see it and top up the difference if you decide to.

The casual worker is on irregular hours, so the 12.07% method applies. Over the leave year they work 480 hours, accruing 12.07% of that — 57.9 hours of paid holiday. If you use rolled-up holiday pay instead, you add at least 12.07% to each period's pay and itemise it separately: on the National Living Wage of £12.71 an hour, a 30-hour week is £381.30 of work plus £46.02 of holiday pay, shown as its own line on the payslip. They still have the right to take the time off — the money has simply already been paid.

Then the one that generates most arguments: the leaver. The full-timer resigns and finishes on 31 July, seven months into a leave year that started on 1 January. They've accrued 28 × 7/12 = 16.33 days. They've taken 10, so you owe 6.33 days in the final payslip. On a £30,000 salary across 260 working days a year, a day is £115.38, so that's £730.36 gross. Had they taken 20 days instead, they'd be 3.67 days overdrawn — and you can only deduct that from final pay if the contract expressly says you can.

The practical admin that prevents all of this

Three habits solve most holiday problems in a small business before they start. Set out entitlement clearly in every contract, including exactly how bank holidays are treated. Track leave centrally, in hours, somewhere both you and the employee can see it, rather than in your head or a scattering of emails. And define your leave year explicitly — a calendar year, your financial year, or each person's start date — because 'when does my allowance reset' is a question you don't want to be answering differently to different people.

It's twenty minutes of setup that prevents the kind of conversation that damages a good working relationship over what's usually a genuine misunderstanding rather than a real disagreement.

Common questions

Do I have to give staff bank holidays off?

No. There is no automatic legal right to paid time off on a bank holiday in the UK, and no right to extra pay for working one. Employers can include the eight usual bank holidays inside the 5.6 weeks of statutory entitlement, which is what '28 days including bank holidays' means and which leaves 20 days the employee chooses. What matters is that the contract states which arrangement you use, in words a new starter cannot misread. '28 days including bank holidays' and '20 days plus bank holidays' are two very different offers, and the second is worth roughly a week and a half more a year. If you require staff to work bank holidays, say that in the contract too rather than assuming it.

How do I work out holiday for someone on irregular hours?

Accrue it at 12.07% of the hours they actually work in each pay period. That method applies to irregular-hours and part-year workers for leave years starting on or after 1 April 2024, and the 12.07% comes from 5.6 weeks of holiday against the 46.4 working weeks left in the year. Someone who works 60 hours in a month therefore accrues 7.24 hours of holiday. You can bank that for them to take as leave, or use rolled-up holiday pay by adding at least 12.07% to each period's pay — but if you do, it must appear as its own separate line on the payslip rather than being folded into the hourly rate. Either way, they keep the right to take the time off.

What do I owe someone for holiday when they leave?

Payment for statutory holiday accrued up to their leaving date and not yet taken — not a full year's allowance, and not nothing. Work out the proportion of the leave year they were employed for, apply it to their entitlement, and subtract what they have already taken. Someone on 28 days leaving seven months into a 1 January leave year has accrued 16.33 days; if they have taken 10, you owe 6.33 days in the final payslip. The reverse case matters just as much: where someone has taken more than they accrued, you can only recover the difference from final pay if the contract expressly gives you that right. Most templates do — confirm yours does before you need it.

Can I make someone take holiday at a particular time, or turn a request down?

Yes to both, with notice. You can require a worker to take leave on specified days — a Christmas shutdown, for instance — by giving notice of at least twice the length of the leave concerned, so two weeks' notice to close for one week. You can refuse a request by giving notice at least as long as the leave requested. Both are default rules under the Working Time Regulations, and a contract can set out different arrangements, so check what yours actually says. The thing you cannot do is refuse leave all year and then decline to carry it over: an employer who repeatedly blocks requests and lets the entitlement lapse is on the losing side of that argument.

Can unused holiday be carried into the next year?

The default is no — statutory leave should be taken in the year it relates to, and 'we were too busy' is not an exception. The exceptions are specific rather than discretionary. A worker who could not take leave because of long-term sickness can carry over up to four weeks and must be allowed 18 months from the end of that leave year to use it. Someone on maternity, paternity, adoption or shared parental leave can carry over their full entitlement. You can always be more generous contractually, and plenty of small employers let a few days roll into January. If you do, cap it and put a use-by date on it, or you accumulate a liability payable in cash the day somebody resigns.