3. Calculate leave entitlement

Annual leave begins to build up (‘accrue’) as soon as a worker starts their job.

An employer can use a ‘leave year’ or an ‘accrual’ system to work out how much leave their staff should get.

Leave year

An employer must usually tell their staff the dates of their statutory leave year as soon as they start working, eg it might run from 1 January to 31 December.

Workers must take their statutory leave during this time. If a leave year isn’t set out in a contract then it will start:

  • on the 1st day of a new job (if started after 1 October 1998)
  • on 1 October (if started on or before 1 October 1998)

The leave year and holiday entitlement is not affected by maternity, paternity or adoption leave. The employee still builds up (‘accrues’) holiday over these periods.

Leave entitlement when starting a new job

If a worker starts their job part-way through a leave year, they’re only entitled to part of their total annual leave for the current leave year. What they get depends on how much of the year is left.

Use the holiday entitlement calculator to work out how much leave someone has left.

Accrual system

An employer can use an accrual system to work out a worker’s leave during the first year of the job. Under this system, a worker gets one twelfth of their leave in each month. So by the third month they’d be entitled to a quarter of of their total leave, eg 7 days out of 28 for a 5-day week.

Carrying over leave

The worker’s contract says how many days’ leave they can carry over into the next year.

If a worker gets 28 days’ leave, they can carry over up to a maximum of 8 days.

If a worker gets more than 28 days’ leave, their employer may allow them to carry over any additional untaken leave. Check the employment contract, company handbook or intranet site to see what the rules say.

If a worker can’t take all of their leave entitlement because they’re already on a different type of leave (eg sick, maternity or parental leave), they can carry over some or all of the untaken leave into the next leave year.

An employer must allow a worker to carry over a maximum of 20 of their 28 days’ leave entitlement if the worker couldn’t take annual leave because they were off sick.