Holidays

Holidays form an important part of the working year: important for employees because they give them the chance to recharge batteries; important for employers because they can pose logistical headaches, especially for smaller businesses that often miss the presence of key employees.

But with a bit of forward planning, all businesses can make sure that workers get the right amount of time off without jeopardising the functionality of the firm.

Holidays for staff: the rules

Full-time workers are entitled to a statutory minimum of 5.6 weeks' holiday in a leave year. For someone on a five-day week, that's 28 days paid holiday annually. Those 28 days can include bank holidays. For part-time workers, holiday is calculated on a pro-rata basis. Of course, an employer can offer more than 28 days.

For statutory purposes, paid holiday is capped at 28 days: even if someone works a six-day week, they are entitled to no more than 28 days of paid leave. Employees are entitled to holiday leave from the first day of their employment.

Paid holiday entitlements need to be included in workers' contracts of employment.

Unused holiday

Workers have to take a minimum of four weeks' leave annually. If there is any unused statutory holiday left over, provided both the employer and employee agree, it can be carried into to the next leave year but no further than that.

Holiday pay

For every week of holiday they take, employees must be paid a week's earnings. This is worked out according to the sort of work they do: fixed hours and pay; variable hours and pay; and shift work, for example. Employees are entitled to their holiday pay at the time they actually take their holiday.

Calculating leave entitlements

For full-time employees, this is quite straightforward: five days a week equals 28 days a year holiday. For part-time workers, it is worked out on a pro-rata basis: if someone works two days a week, then their holiday entitlement is 5.6 x 2 or 11.2 days.

In the case of shift workers, it is simpler to make the calculation based on the number of shifts. If a worker puts in three 10-hour shifts a week, their holiday entitlement is the equivalent to 5.6 x 3 = 16.8 10-hour shifts.

For employees who work annualised hours, the calculation begins with the average number of hours worked over the year. Divide that figure by 46.4 weeks (52 minus 5.6) to arrive at an hour per week number. Multiply that by 5.6 to give the total hours to which they are entitled ass holiday leave.

Maternity, paternity adoption and parental leave

Staff on statutory maternity, paternity, adoption and parental leave can accumulate paid holiday leave.

Those on maternity and adoption leave can accrue holiday entitlements during ordinary and additional leave, although paid holiday leave can't be taken simultaneously with maternity leave. So if an employee knows that maternity leave is looming, the employer may want to discuss whether the employee would like to take their holiday before the start of the maternity period or at the end.

Employees who are on statutory paternity or parental leave can also accrue holiday entitlements while they are away.

Sickness absence

Workers who are off work sick can still accumulate holiday leave entitlements.

Should a worker fall ill just before embarking on some annual paid leave, or while on holiday itself, the employer is not obliged to turn holiday leave into sick leave. But progressive employers may allow staff who fall genuinely ill the chance to claim their holiday leave back for use at some other time in the leave year.

Public holidays

Employers don't have to give employees paid time off for public and bank holidays, but their terms and conditions should include whether they have the right to paid leave on public holidays and if their rate of pay for working a public holiday is higher than their normal rate.

Giving notice of leave

Employees must tell employers of their wish to take paid leave in advance of the leave. Usually, employers set out that period of notice in the employment contract. If there is nothing in writing, then employees must allow a notice period that is a minimum of twice the length of the period of leave they are asking for. So a week's lave would require at least a fortnight's notice.

Limiting leave

Employers can impose certain conditions on when holiday leave is taken. Those conditions could be detailed in the employment contract or they could be a matter of tradition.

More often than not, limitations on leave involve certain periods when leave cannot be taken, or placing a ceiling on the amount of leave that can be taken in one go.

An employer who has particularly busy periods, for example, may wish to build restrictions into the contract of employment over just how many staff can take holiday leave and for how long during those periods.

Managing holiday leave

Holidays are precious times for employees, and good employers will be keen to make sure that their staff enjoy time off work. They are more likely to return to work rested, refreshed and motivated.

From an employer's point of view, of course, holidays can present a problem as well as a benefit. If too many key staff want to take time off during the same period, a business may need to take on extra cover, which is an expense. And there is no guarantee that agency or temporary staff will have the same inside knowledge of the business.

It makes sense, therefore, that staff understand the rules about taking leave: that too many people cannot book the same period; that certain busy trading times demand that as few people as possible are away; and that departments cannot be left understaffed.

Planning

The key to successful holiday management is planning. A computerised holiday booking system - one that maps leave records past and future, and links to the payroll - is essential. That way owners and managers can keep track not only of who has taken what leave but also of areas of the year that look in danger of being overbooked. Making the leave calendar or diary available to staff also helps: employees can see when other staff have already booked holidays and can plan their own leave accordingly.

Notice periods are important too. Employers may want to insist on a month's notice for leave periods of more than a week, for example. This helps to prevent sudden rushes of holiday requests and provides the chance to arrange cover or to redeploy staff.

Some sections of the year are bound to be more popular than others, so it is probably sensible and fair to impose a 'first come, first serve' rule: employees will understand that booking their holidays well in advance means that their requests will take precedence over those who book later.

Balance

The wider the spread of leave bookings, the easier is leave to manage. Employers may, then, want to encourage staff to extend their leave evenly across the year. This promotes regular, recuperative breaks, which are good for morale and productivity, and makes the handling of time off simpler.

Checking

Monitoring the leave that remains to each employee gives employers a precise idea of whether there is likely to be a sudden influx of leave requests. Employers who like to see all their staff take their full statutory time off each year, rather than carry chunks into the next leave year, can also use such monitoring to remind workers of the leave left to them and to encourage them to book a break in good time.

Restrictions

If there are restrictions on when holidays can be taken, make sure everyone is aware of this throughout the year, particularly when those restrictive periods are approaching.

Flexibility

Even where clear rules are in place, however, a little flexibility in dealing with last-minute requests can be good for staff morale and loyalty. So long as that flexibility doesn't discriminate against another employee, or imperil the effective running of the business, employers should accommodate a holiday request where they reasonably can, treating each one on an individual basis.

Call Back Request

1 + 2 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Speak to a
friendly expert
01442 275789

Monday to Thursday (8am to 8pm)

Friday (8am to 7pm)

Saturday (10am to 4pm)

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Money back service guarantee. All your Emails received by 4pm on any normal working day will be answered the same day. Should it be necessary to leave a telephone message it will be answered same day/following day latest or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: newbusiness@sjdaccountancy.com. Our new business team is open Monday to Thursday (8am to 8pm), Friday (8am to 7pm) and Saturday (10am to 4pm)

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.