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This Annual Leave Policy template covers:
how much annual leave staff are entitled to and how annual leave entitlement accrues
the process for requesting annual leave
when annual leave can be reallocated as bereavement leave or family leave (ie parental or adoption leave)
when annual leave can be taken
whether annual leave can be carried forward into the next annual leave year
rules for taking annual leave near the start of employment
Employers are legally required to let staff members take at least 5.6 weeks of paid holiday per year (this may include bank holidays). This is calculated in proportion to the hours actually worked by a staff member (ie pro rata). This holiday entitlement also applies to staff who work casual or irregular hours. Therefore, you should make sure that you have an Annual Leave Policy in place if you employ anybody.
It is important that staff are encouraged to use their full annual leave entitlement (ie all the days of annual leave that they are allowed) so that they can rest. By adopting an Annual Leave Policy and making your staff members aware of it, you encourage staff to take holiday.
For more information, read Employee holidays and How to calculate holiday entitlement.
You can make an Annual Leave Policy using this template. You can then download and print or digitally store your Policy. You should ensure that all staff members know about the Policy and know where they can get a copy of it. If you have a staff member handbook, you should include your Annual Leave Policy in it.
You should also ensure that staff know who to talk to if they have any questions or concerns about annual leave.
If you do not have a staff member handbook, you can make one using this our template Employee handbook.
Under the Working Time Regulations 1998, staff in the UK are entitled to at least 5.6 weeks of paid holiday per year (pro rata). For full-time workers, this means 28 days. For part-time workers, this is calculated in proportion to the number of hours they work. 20 days of the holiday entitlement come from UK legislation, the remaining 8 from European legislation. Employers can choose to offer their staff members more than 28 days of paid holiday.
Employers can also decide whether staff can take bank holidays off in addition to their annual leave entitlement. In England and Wales, there are usually 8 bank holidays per year. In Scotland, there are usually 9.
For more information, read How to calculate holiday entitlement and Bank holidays and the law.
Full-time, part-time and casual staff are entitled to paid holiday. Businesses are not required to give self-employed contractors annual leave and holiday pay.
For more information about the status of staff, read Consultants, workers and employees. If you need help determining a staff member’s status, you can Ask a lawyer.
If a staff member is unable to use their whole entitlement during the relevant annual leave year they may be able to carry over (or ‘carry forward’) some of their entitlement to use in the next annual leave year(s).
If they were unable to take a holiday because they were on long-term sick leave or family leave (ie parental or adoption leave), they can carry over at least 4 weeks of their entitlement. A rule was introduced during the Coronavirus (COVID-19) pandemic allowing staff members to carry over at least 4 weeks of holiday time if they were unable to use it due to being ill with Coronavirus or because they had to continue working due to the pandemic.
Employers can allow staff to carry over annual leave entitlement for other reasons too, for example, because they wanted to finish work on a particular project before taking annual leave.
If a staff member has unused annual leave entitlement when they finish their employment with you, they must be paid any remaining holiday pay they are entitled to when they leave. Alternatively, employers can require the staff member to use their remaining entitlement during their notice period.
Making an Annual Leave Policy online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Annual Leave Policy you will need the following information:
Business details
What is the employer’s name?
Who is responsible for decisions about staff members’ annual leave?
Annual leave
When does the annual leave year start?
When does the annual leave year end?
What is staff members’ holiday entitlement?
Are bank holidays additional to or included in the holiday entitlement?
If bank holidays are additional, can alternate days be taken off instead of a bank holiday?
If bank holidays are included, do they need to be taken off work?
How much notice must staff members give when requesting annual leave?
How must staff members request to take annual leave?
Where is information about annual leave entitlements recorded?
Will any commissions, bonuses or overtime that staff members receive be added onto all of their holiday pay?
Other types of leave
Where can staff members get a copy of the employer’s sickness policy?
Does annual leave entitlement continue to accumulate whilst staff members are on bereavement leave?
Where can staff members get a copy of the employer’s bereavement leave policy?
Required leave
Are staff members required to take annual leave at a certain time? If so, when must staff members take annual leave?
New staff members
Will annual leave be approved for holidays arranged before a staff member started work for the employer?
Are new staff members required to work for a certain period before taking annual leave?
Unused annual leave
How much annual leave can staff members carry over if they were unable to use their entitlement due to long-term sick leave or family leave?
How much annual leave can staff members carry over if they were unable to use their entitlement because of the Coronavirus (COVID-19) pandemic?
Can staff members carry over any unused annual leave entitlement for other reasons? If so:
How much annual leave entitlement can be carried over?
By when must staff members use their carried-over annual leave entitlement?
Can staff members receive payment instead of any unused annual leave?
An Annual Leave Policy sets out a business’ approach to holiday entitlements and holiday pay. As a result, this Policy template covers:
Purpose of the Annual Leave Policy
This section provides a basic overview of the Annual Leave Policy and sets out why the Policy is being adopted by the employer. It also clarifies to whom the Policy applies and that it is non-contractual and can be amended by the employer at their discretion.
Annual leave entitlement
This section details the employer’s leave year and annual leave entitlement. It also clarifies the circumstances in which annual leave continues to accrue when a staff member is not working (eg because they are on family leave).
Requesting annual leave
This section sets out how a staff member can request annual leave (including how much notice they must give). It also explains when the employer can reject a holiday request.
Holiday pay
This section sets out that staff members will receive their regular pay when they take annual leave.
Illness and bereavement during annual leave
This section details what happens if a staff member becomes sick or experiences bereavement while on annual leave. It explains how annual leave can be reallocated as sick or bereavement leave.
Requiring staff to take annual leave
This section sets out when the employer may request that a staff member takes annual leave. It also sets out how much notice the employer must give staff members to do so.
When annual leave can be taken
This section sets out when staff members can take annual leave and who such arrangements should be made with.
Bank holidays
This section sets out how bank holidays relate to the annual leave entitlement (ie whether they are included or excluded from the annual leave entitlement). Where relevant, this section will also set out whether an alternate day can be taken off instead of a bank holiday.
Carrying over annual leave entitlement
This section encourages staff members to take their full annual leave entitlement within a given leave year. It then explains how any unused leave will be treated (ie whether some or all of any unused leave can be carried over or whether it will be lost). It also sets out the situations in which annual leave can always be carried over into the next leave year.
Holidays arranged before employment commences
If relevant, this section will set out how any holiday arranged before a staff member was hired by the employer will be treated.
Ending employment
This section details what happens to annual leave entitlements when a staff member stops working for the employer.
You can edit your document if you want your Annual Leave Policy to include further or more detailed provisions. However, if you do this, you may want a lawyer to review or change the Policy for you, to make sure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
Make sure you comply with the commitments made in the Policy
Staff members are entitled to take annual leave and employers should encourage staff members to take their annual leave. By making an Annual Leave Policy, employers take an important step towards encouraging staff to take holiday. However, simply having a Policy in place is not enough. Employers should take physical steps to implement the Annual Leave Policy and to bring it to the attention of their workforce. Employers should also ask managers to encourage staff members to take their annual leave.
Consider the other types of leave for which you should adopt workplace policies
Annual leave is one type of leave to which staff members are entitled. Depending on a staff member’s employment status (eg whether they are a staff member or a worker) they may also be entitled to other types of leave. As an employer, it is prudent to have relevant leave policies in place to outline and clearly communicate such leave entitlements. Examples of other policies you may consider adopting, include:
a Maternity leave policy, informing staff about their right to maternity leave
a Paternity leave policy, informing staff about their right to paternity leave
a Shared parental leave policy, informing staff about the shared parental leave system
a Parental leave policy, informing staff about their right to (unpaid) parental leave
a Bereavement leave policy, setting out your approach to bereavement leave and pay
a parental bereavement leave policy, setting out the right for some staff to take time off when they lose a child. Ask a lawyer if you need a parental bereavement leave policy
a Time off for dependents policy, setting out the right to unpaid time off to assist dependants if they’re involved in sudden or unexpected emergency situations
For more information, read HR policies and procedures.
Understand when to seek advice from a lawyer
Ask a lawyer for advice if:
you employ agency workers or contractors and you are unsure what annual leave they are entitled to
you want to set different annual leave rules for different staff members
this Policy doesn’t meet your needs
