How to Manage Employee Holiday in the UK: A 2026 Guide

Understanding UK Holiday Entitlement (2026)

In 2026, UK employment law continues to be governed by the Working Time Regulations 1998. Most workers are entitled to 5.6 weeks of paid holiday per year – this equates to 28 days for someone working a five-day week. However, this is a minimum. Many employers offer more generous allowances.

Full-Time Employees

A full-time employee (typically working 37.5 – 40 hours a week) will generally receive 25 – 28 days of paid holiday, including bank holidays. This is calculated as 5.6 weeks x the number of days worked per week.

Part-Time Employees

Part-time employees are entitled to a pro-rata amount of holiday pay based on the hours they work. For example, someone working half the hours of a full-time employee would be entitled to half the holiday allowance.

Zero-Hour Contract Employees

The entitlement for zero-hour contract workers can be more complex. They accrue holiday entitlement based on the hours they actually work, calculated as 12.07% of the hours worked. This is a legal requirement, and employers must accurately track hours to ensure correct accrual.

Bank Holidays

Bank holidays are typically included within the 5.6-week entitlement. However, employers can choose to offer bank holidays as additional days off, on top of the statutory allowance. The current bank holidays for England and Wales in 2026 are:

• New Year’s Day (1st January)
• Good Friday (2nd April)
• Easter Monday (5th April)
• Early May Bank Holiday (4th May)
• Spring Bank Holiday (25th May)
• Summer Bank Holiday (31st August)
• Christmas Day (25th December)
• Boxing Day (26th December)

Scotland has slightly different bank holidays.

Accrual Rates

Employees accrue holiday entitlement throughout the year, usually on a monthly basis. A common method is to divide the annual entitlement by 52 (weeks of the year) to determine the weekly accrual rate.

Legal Requirements for Holiday Management in the UK

The Working Time Regulations 1998 are the cornerstone of UK holiday law. Key requirements include:

• Minimum Entitlement: As outlined above, 5.6 weeks paid holiday annually.
• Notice Periods: Employees must provide at least twice the length of the leave they wish to take as notice. For example, requesting one week off requires two weeks’ notice. Employers must provide equivalent notice for denying leave.
• Holiday Carry-Over: Traditionally, the UK has been strict about carry-over of untaken holiday. However, recent case law (and anticipated further clarification in 2026) has reinforced the need for employers to enable carry-over in certain circumstances, particularly where employees have been unable to take leave due to illness or business needs.
• Holiday Pay: Holiday pay must be calculated at the employee’s usual rate of pay.

Non-compliance can lead to legal action and penalties.

Creating a Clear Holiday Policy

A well-defined holiday policy is essential. It should cover:

• Holiday entitlement for different employment types.
• Booking procedures (e.g., online system, manual forms).
• Notice periods for requests and approvals.
• Carry-over rules (in line with current legislation).
• Procedure for dealing with sickness during holiday.
• Rules regarding holiday during probationary periods.

Ensure the policy is easily accessible to all employees (e.g., on the company intranet).

Effective Holiday Request & Approval Processes

A fair and transparent process is crucial. Consider these strategies:

• First-Come, First-Served: A simple method, but can lead to challenges.
• Prioritisation: Consider seniority, business needs, and previous holiday taken.
• Holiday Calendars: Use a shared calendar to visualise who is away and avoid conflicts.
• Clear Communication: Inform employees promptly about approval/denial decisions, with clear explanations.

The Benefits of Holiday Management Software

Holiday Management Software automates key processes, reducing administrative burden and improving accuracy. Benefits include:

• Automated accrual calculations
• Self-service booking for employees
• Real-time visibility of team availability
• Reduced errors
• Improved employee experience
• Reporting and analytics

Top Holiday Management Software for UK Businesses (2026)

Here’s a comparison of some leading options:

Software	Price (GBP – per month)**	Features	Integrations	Suitable For
Timetastic	6.5	Simple booking, automated accrual, email notifications, self-service.	Google Calendar, Outlook.	Small to Medium Businesses (up to 50 employees)
LeavePlanner	4.99	User-friendly interface, holiday tracking, reporting, absence management.	Xero, Quickbooks.	Small Businesses (up to 20 employees)
BambooHR	8.0	Comprehensive HR suite, including holiday tracking, performance management, and applicant tracking.	Various (extensive API).	Medium to Large Businesses (50+ employees)
Sage HR	7.5	Integrated with Sage accounting software, holiday management, employee records.	Sage accounting suite.	Businesses already using Sage products.
HR Partner	9.0	Advanced features, complex leave rules, customisation options, reporting.	Various (limited API).	Large Enterprises (100+ employees)

**Prices are approximate and based on standard plans as of late 2026. Check vendor websites for the latest pricing.

Managing Bank Holidays & Public Holidays

As previously mentioned, employers can choose to include bank holidays within the 5.6 weeks’ statutory entitlement or provide them as additional days off. If an employee is required to work on a bank holiday, they are entitled to either (a) a day off in lieu or (b) enhanced pay (often double time).

Dealing with Complex Holiday Situations

• Long-Term Sickness: Holiday accrual continues during sick leave, but employees may not be able to take leave. Consider allowing carry-over in these situations.
• Maternity/Paternity Leave: Employees continue to accrue holiday entitlement during statutory leave.
• Leavers: Employers must pay employees for any accrued but untaken holiday upon termination of employment.

Holiday Pay Calculations in the UK (2026)

Holiday pay must be calculated to ensure employees receive their usual rate of pay during their leave. This can be complex for employees with variable pay (e.g., commission, overtime). The calculation method should be clearly outlined in the holiday policy.

For employees with variable pay, a ‘reference period’ is used to calculate the average weekly earnings. The reference period is typically the 52 weeks preceding the holiday.

Holiday Management Best Practices for 2026

To create a positive holiday culture and ensure smooth management:

• Encourage employees to take their full entitlement.
• Promote work-life balance.
• Communicate holiday policies clearly.
• Use technology to streamline processes.
• Regularly review and update your holiday policy.

FAQ

Q: What happens if an employee is sick during their holiday?

If an employee falls ill during their holiday, they should notify their employer as soon as possible. The employer should then treat the period of illness as sick leave, rather than holiday, and reinstate the holiday days.

Q: Can an employer refuse a holiday request?

Yes, but only on reasonable grounds, such as business needs or staffing levels. The employer must provide the employee with adequate notice of the refusal.

Q: What is the legal minimum holiday entitlement in the UK?

The legal minimum is 5.6 weeks of paid holiday per year, which equates to 28 days for a full-time employee working a five-day week.

Q: How do you calculate holiday pay for someone on commission?

Holiday pay for commission-based employees should be calculated based on their average earnings over a ‘reference period’ (typically the 52 weeks preceding the holiday), including commission payments.

Q: What are the penalties for non-compliance with holiday regulations?

Non-compliance can lead to legal action from employees, potential fines, and reputational damage for the business.

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