A Practical Guide to Working Out Holiday Entitlement in the UK

Decoding UK Holiday Entitlement Rules

Working out holiday entitlement in the UK begins with one simple fact: almost every worker is entitled to 5.6 weeks of paid annual leave. If you’re on a five-day week, that adds up to 28 days off each year.

The real trick is adapting that formula for part-time hours, term-time contracts and irregular schedules. Get it wrong and you risk disputes, tribunals and a hit to staff morale.

At its core, this 5.6-week right is set out in the Working Time Regulations 1998. It applies to nearly everyone—from agency workers to staff on irregular rotas. For the full legal framework, head over to GOV.UK.

UK Statutory Holiday Entitlement At A Glance

Before diving into the finer points, here’s a speedy reference for minimum leave entitlements based on days worked each week:

Days Worked per Week	Statutory Leave in Weeks	Total Leave in Days
1	5.6	5.6
2	5.6	11.2
3	5.6	16.8
4	5.6	22.4
5	5.6	28
6	5.6	33.6
7	5.6	39.2

This table shows the statutory minimum entitlement: you can’t go below these figures, whatever pattern your team follows.

The Role Of Bank Holidays

Including bank holidays within that 28-day total is entirely up to your policy. Some contracts add the eight UK bank holidays on top; others roll them in as part of the statutory minimum.

Key Takeaway: The 5.6 weeks covers everything. How you carve out bank holidays is a matter of company policy—not an extra legal entitlement.

Make sure your contract spells out whether those bank holidays are “in addition to” or “included within” the statutory leave. That small sentence saves big headaches later.

Introducing The Pro-Rata Principle

When someone works fewer days, they should earn fewer days off. It sounds obvious, but putting it into practice can get messy. For part-timers, holiday is calculated by:

• Multiplying 5.6 weeks by the number of days they work each week
• Converting that into a day-count (see the table above)

So, if Jane works three days a week, she gets 3 × 5.6 = 16.8 days of leave. We’ll unpack the exact formulae and worked examples very shortly.

Why Legal Compliance Is Non-Negotiable

Skipping the right holiday calculations isn’t just bad practice—it’s illegal. Missteps can lead to:

• Employment tribunals: Staff can claim unpaid holiday
• Financial penalties: Compensation orders can hit your budget
• Reputational damage: Trust takes a hit when holiday policies feel unfair

Sticking to precise calculations and crystal-clear policies protects your bottom line and shows your team you value their rest. In HR terms, that’s your best defence against disputes.

Calculating Holiday for Full-Time and Part-Time Employees

Once you've got your head around the statutory basics, working out holiday entitlement is mostly a practical task of plugging numbers into a formula. For your full-time staff on a standard five-day week, the maths is thankfully simple.

They’re entitled to 5.6 weeks of paid leave, which works out to be 28 days (5 days × 5.6 weeks). This number usually includes the standard UK bank holidays, but your company policy and employment contract should make this crystal clear.

Things get a little more involved when you're dealing with part-time staff. Their leave is calculated on a pro-rata basis, meaning their holiday time is directly proportional to the hours or days they work. It’s the only way to ensure fairness, but it does require a specific formula to get it right every time.

The Pro-Rata Formula Explained

For a part-time employee who works a set number of days each week, the most straightforward way to calculate their pro-rata holiday is with this simple multiplication:

Number of days worked per week × 5.6 = Total annual holiday days

This calculation gives you the employee's total holiday allowance in days for the entire year. From there, it's just a case of tracking their leave as they book it. Using a set formula removes any guesswork and ensures you're fully compliant with UK employment law.

A common pitfall is 'guesstimating' a fair amount of leave for part-timers. Using a consistent formula not only keeps you on the right side of the law but also shows your team you're being fair and transparent. That's a small detail that goes a long way for morale.

For a deeper dive, check out our complete guide on how to calculate pro-rata holiday.

Worked Example: A Part-Time Employee on a Three-Day Week

Let's see this formula in action. Imagine you've just hired Sarah, who will be working three days a week—Monday, Tuesday, and Wednesday.

To figure out her annual leave, you’d do the following:

• First, take the number of days she works per week. In this case, it's 3.
• Then, multiply this by the statutory entitlement of 5.6 weeks.
• The calculation is: 3 days × 5.6 weeks = 16.8 days of annual leave.

So, Sarah is entitled to 16.8 days of paid holiday for a full leave year. It's common practice to round this up to the nearest half or full day, so you might grant her 17 days just to keep things simple for everyone.

Worked Example: An Employee Working Half-Days

What about someone who works part-time hours but spread across five days? Let's take David, who works every morning, Monday to Friday. Technically, he works five days a week, but his hours are much shorter.

In situations like this, it’s much clearer and more accurate to calculate the entitlement in hours instead of days. This avoids any confusion over what actually counts as a "day" of leave.

Here’s how you’d tackle it:

1. Calculate the Full-Time Equivalent (FTE) in hours: A standard full-time week is often 37.5 hours (7.5 hours × 5 days). The total holiday entitlement in hours for a full-timer would be 37.5 × 5.6 = 210 hours.
2. Determine the employee's weekly hours: Let's say David works 4 hours each morning, making his weekly total 20 hours.
3. Find the pro-rata percentage: Divide David's hours by the FTE hours: 20 ÷ 37.5 = 0.533 (or 53.3%).
4. Calculate the final holiday hours: Multiply the total FTE holiday hours by his percentage: 210 hours × 0.533 = 111.93 hours.

You can round this up to 112 hours of annual leave. Now, when David books a morning off, he simply uses 4 hours from his total allowance. This method is brilliant for its precision, especially for staff with varied daily working patterns.

Getting Holiday Pay Right for Irregular and Zero-Hours Staff

Figuring out holiday entitlement for staff on irregular or zero-hours contracts can feel like one of the trickiest parts of payroll. It's not like your salaried employees with their fixed hours; you can't just run a simple pro-rata calculation and call it a day. Their hours go up and down, so their holiday entitlement has to follow suit.

The best way to handle this is to ditch the idea of calculating days and switch your thinking to an accrual system. In simple terms, this means your team members earn their holiday entitlement as they work. It's a fair, legally sound approach that makes sure their holiday pay is directly linked to the hours they’ve actually put in.

For a long time, the go-to method for this was the 12.07% formula. While some recent government guidance has updated the approach for certain leave years, understanding this percentage is still essential because it’s the foundation of how holiday accrual works.

Where Does The 12.07% Come From?

That number, 12.07%, can look a bit random at first glance, but there's solid logic behind it. It's all based on the standard working year.

The statutory holiday entitlement in the UK is 5.6 weeks. A full year has 52 weeks. If you take the holiday weeks away from the total, you're left with the number of weeks someone is actually working.

• 52 total weeks - 5.6 holiday weeks = 46.4 working weeks

To figure out the holiday percentage, you just divide the holiday weeks by the working weeks.

• (5.6 holiday weeks ÷ 46.4 working weeks) × 100 = 12.07%

This percentage is the key. It represents the proportion of holiday time an employee earns for every single hour they work.

By using the 12.07% figure, you ensure someone on a zero-hours contract earns their 5.6 weeks of holiday over the year, just like a full-time employee. It's the mechanism that creates fairness between different working patterns.

How The Accrual Method Works in Practice

Let’s see how this plays out in a real-world scenario. Imagine you have a casual worker, Tom, who you bring in to help during busy seasons. Last month, he worked a total of 80 hours.

To work out the holiday pay he has earned for that month, you’d follow these steps:

1. Calculate his total earnings: First, work out Tom's gross pay for the month. If his hourly rate is £11.50, his earnings are 80 hours × £11.50 = £920.
2. Apply the percentage: Next, you apply the 12.07% to his gross pay to find the value of the holiday pay he’s earned. So, that’s £920 × 12.07% = £111.04.
3. Record what he’s accrued: This £111.04 is the holiday pay Tom has built up for that month. It should be set aside and paid out to him when he decides to take his paid time off.

This is often called the 'percentage of hours worked' system, and its biggest advantage is that it's transparent and easy to track. It directly links holiday pay to actual hours worked, which is really the only fair way to do it for staff with unpredictable schedules. We dive deeper into this topic in our dedicated article on holiday entitlement on a zero-hour contract.

A Heads-Up on New Guidance

It's really important to know that for leave years starting on or after 1st April 2024, the government has issued updated guidance. A new system now allows employers to pay 'rolled-up' holiday pay, which is where an extra 12.07% is added to the worker's payslip each pay period.

This change is designed to make things simpler, but it comes with certain conditions. The traditional accrual method we’ve just walked through remains a perfectly valid and widely used approach. The most important thing is to pick one compliant method and stick to it consistently for all your irregular-hours and part-year workers. That way, everyone is clear on how their holiday pay is calculated, which is key to maintaining fairness and trust.

Managing Leave Carry-Over and Final Holiday Pay

Figuring out holiday entitlement isn't just about the day-to-day. Two of the trickiest (and most common) challenges are managing leave at the end of the holiday year and calculating the final payment when someone leaves.

Getting these moments right is absolutely crucial for staying on the right side of the law and maintaining a fair, transparent relationship with your team. How you handle unused leave is a cornerstone of a solid holiday policy, and any grey areas here can quickly lead to confusion or disputes.

The Rules on Carrying Over Unused Leave

Let's start with the basics. UK law is clear that workers must take at least four weeks of their statutory holiday entitlement within the leave year it's accrued. For a full-timer, that’s 20 days. As a general rule, this chunk of leave can't be carried over or paid out instead, unless an employee is leaving.

The remaining 1.6 weeks (the other 8 days) is where you have more flexibility. Your company policy can dictate whether you:

• Allow employees to carry over some or all of this additional leave.
• Set a deadline for when that carried-over leave must be used by (e.g., by the end of March).
• Enforce a "use it or lose it" policy for this portion of their entitlement.

Of course, there are important exceptions. If an employee is on long-term sick leave or maternity leave, they must be allowed to carry over any untaken statutory leave into the next year. You can’t penalise them for being unable to take it.

Expert Tip: Your employment contract is king. Clearly state your carry-over rules, including any limits on the number of days and the deadline for using them. Ambiguity here is a common source of employee grievances.

Calculating Final Holiday Pay on Termination

When an employee’s contract ends, you are legally required to pay them for any statutory holiday they’ve built up but not taken. It doesn't matter if they resigned or were dismissed; this calculation has to be precise and included in their final payslip.

The process involves working out their pro-rata entitlement up to their very last day, and then subtracting any holiday they've already used. For hourly staff, converting those hours into a final payment is a critical step.

This calculation is a fundamental part of offboarding, ensuring you handle that final payment correctly.

Worked Example: Final Holiday Pay

Let's walk through a common scenario. An employee, Alex, works a standard five-day week and gets the statutory 28 days of annual leave. His leave year runs from January to December, and he’s leaving the company on 30th June.

By the time he leaves, he has already taken 10 days of holiday.

First, you need to calculate his entitlement for the time he’s worked. Alex has been with the company for exactly half the year (6 out of 12 months). His pro-rata entitlement is 28 days ÷ 2 = 14 days.

Next, subtract the leave he's already taken. He's used 10 days out of his 14-day entitlement, which means 14 days - 10 days = 4 days.

So, Alex is owed pay for 4 days of unused holiday. To work out the cash value, you'd find his daily pay rate and multiply it by four, adding this amount to his final salary payment.

Interestingly, the culture around taking leave is shifting for the better. Recent statistics show unused annual leave in the UK has plummeted by 71% since 2019, dropping from 18.5 days per employee to just 5.3 days. This reflects a much healthier approach to time off, which can certainly simplify these final pay calculations. You can explore more about these trends in the latest state of annual leave report.

But what if it's the other way around, and an employee has taken more holiday than they've accrued? You can only deduct this from their final pay if you have a crystal-clear clause in their employment contract allowing you to do so. Without that written agreement, you can't legally reclaim the pay for the extra days taken.

How Automation Simplifies Holiday Entitlement Management

After wrestling with the manual calculations, it’s pretty obvious that working out holiday entitlement can become a massive administrative headache. Spreadsheets, scraps of paper, and endless email threads aren't just inefficient; they're also wide open to human error. That can easily lead to compliance headaches and unhappy employees. This is exactly where technology provides a much smarter path forward.

Modern leave management software simply removes the risk and the repetitive grind of tracking holiday. Instead of burning hours cross-checking calendars and updating records, you can lean on a system that does all the heavy lifting for you. It guarantees accuracy and, crucially, frees up your valuable time for more strategic HR work.

Automated Calculations for Every Scenario

One of the biggest wins with automation is its knack for handling complex calculations instantly and accurately. Whether you're bringing on a new part-timer or managing a team of casual staff, the software applies the correct rules every single time. No second-guessing.

Think about these common scenarios that become completely effortless:

• Pro-Rata Entitlement: When a new part-time team member joins, the system automatically figures out their pro-rata holiday allowance from their start date and working hours. No manual formulas are needed.
• Accrual for Irregular Hours: For staff on zero-hours contracts, the software can automatically accrue their holiday based on the hours they actually work, correctly applying the 12.07% rate each pay period.
• Carry-Over Balances: At the end of your leave year, the system handles your carry-over rules automatically, transferring the right number of unused days according to your company policy.

This level of automation means managers and HR teams can trust the data without having to be experts in every fine detail of leave legislation.

By taking manual data entry out of the equation, businesses can slash payroll and leave-related errors. An automated system acts as a single source of truth, giving everyone from employees to the finance director total confidence in the numbers.

A Seamless and Transparent Process

Beyond the numbers, automation completely changes the experience of requesting and approving time off. It transforms the process from a fragmented, manual mess into a clear, centralised workflow that everyone can see.

Imagine a manager getting a holiday request. With an integrated system, they can instantly see the team's schedule and the employee's remaining balance right there in the notification. Approval is just a click away, and the central calendar updates immediately for everyone.

This transparency is a win for everybody:

• Employees can check their balance and pop in a request 24/7 without having to chase HR.
• Managers can make smart approval decisions on the spot, preventing clashes and rota gaps.
• HR and Payroll get instant, up-to-date reports on leave liabilities and trends without ever having to open a spreadsheet.

Looking into various workflow automation examples can offer great ideas for improving not just holiday management, but tons of other admin processes too. The core principles of creating clear, repeatable steps are universal.

Freeing Your Team for Strategic Work

At the end of the day, automation isn't just about doing the same tasks faster; it's about eliminating low-value admin work altogether. When your team is no longer bogged down in the tedious job of calculating holiday pay, they can focus on what truly matters. That means initiatives like improving employee well-being, developing your talent, and building a stronger company culture.

This shift from reactive admin to proactive strategy is one of the most powerful results of adopting modern HR tech. You can learn more by reading our complete guide to automated leave management systems. A solid system ensures you're compliant and accurate, but its real value is in the human hours it gives back to your business.

Common Questions on Working Out Holiday Entitlement

Even with the best formulas and policies in place, you’ll always run into tricky scenarios that can cause confusion. Let's tackle some of the most frequent questions we see from HR managers and team leaders, giving you clear, practical answers to manage your team's leave with total confidence.

These situations often crop up around major life events or specific business needs, and knowing the right way to handle them is key to staying compliant and, just as importantly, treating your employees fairly.

What Happens to Holiday Entitlement During Maternity Leave?

This is a big one, and thankfully, the rule is straightforward. An employee's statutory and contractual holiday entitlement continues to accrue as normal throughout their entire maternity leave period. This applies to both Ordinary and Additional Maternity Leave.

Because an employee can't take annual leave and maternity leave at the same time, it’s best practice to plan with them how they’d like to use this accrued time. Often, they’ll choose to take it before their maternity leave starts or add it to the end, which nicely extends their time away from work. It’s crucial to remember that this accrued leave can’t be paid in lieu unless their employment is ending.

Can We Require an Employee to Take Annual Leave?

Yes, you absolutely can. Employers are allowed to require staff to take their statutory holiday on specific dates. The most common reason for this is a company-wide shutdown, for instance, over the Christmas period.

The key thing to get right here is notice. You must give notice that is at least twice as long as the period of leave you are asking them to take.

• To require one week of leave: You have to provide at least two weeks' notice.
• To require two days of leave: You have to provide at least four days' notice.

This rule ensures that your team has enough time to plan their lives around it. It's always a good idea to have this policy spelled out clearly in your company handbook to avoid any surprises.

Having a clear, written policy on forced leave periods and notice requirements prevents misunderstandings. It ensures everyone knows where they stand, especially around predictable shutdown periods like Christmas, making planning easier for both the business and its employees.

How Do You Handle Leave for New Starters and Leavers?

For anyone who joins or leaves part-way through your leave year, their holiday entitlement has to be calculated on a pro-rata basis. You can’t just give them the full annual amount – that wouldn't be fair to them or the business.

A simple and common method is to work out their full-year entitlement, divide it by 12 to get a monthly figure, and then multiply this by the number of full months they will have worked in the leave year. For leavers, this exact calculation is essential for working out their final pay and settling up for any untaken days.

Are Part-Time Staff Entitled to Bank Holidays?

To avoid any whiff of discrimination, you have to treat part-time staff fairly when it comes to bank holidays. The best way to do this is to give them a pro-rata entitlement to bank holidays, regardless of whether their usual working days fall on them.

Let’s say a full-time employee working five days a week gets 8 bank holidays. An employee working three days a week should receive 3/5ths of that. The calculation would be (8 ÷ 5) × 3 = 4.8 days.

You would then add these 4.8 days to their regular annual leave allowance. This creates a single, fair entitlement figure for the year and avoids penalising part-timers who don't happen to work on Mondays, which is where most bank holidays fall.

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