1. Introduction to Holidays

Everyone likes a holiday
The one thing you can be sure of is that every employee (and worker) will want to book and take their holiday. Holidays need to be managed because holiday is a cost to the business. Holidays also have to be planned to make sure you have sufficient cover.

The right to paid holiday entitlement is detailed in the Working Time Regulations 1998 (WTR). This brings holiday entitlement under the umbrella of health and safety as it is vital that employees take adequate holiday and have a break from work. 

Holiday Entitlement

The minimum statutory holiday entitlement in the UK is currently 5.6 weeks (or 20 days plus 8 bank holidays if you work five days or more). This represents 12.07% of an employee's salary.

You can pay an employee more than the statutory minimum and this would be detailed in the contract of employment. For example, you may decide to pay 25 days holiday plus bank holidays or more. You may also want holiday to increase with length of service. 

Holiday Pay

Every employee and worker is entitled to paid holiday at this minimum rate. For every week's holiday someone takes, they need to be paid at their 'normal' weekly wage. When someone is paid a salary, then they will be paid as normal when they are on paid holiday leave. However, when someone has other 'regular payments' they receive (e.g. regular overtime, allowances or regular bonuses), then this needs to be taken into consideration when calculating paid holiday. See holiday pay for further details.

Calculating Holiday Entitlement

A business would normally have a holiday year. The most common are 1st April to 31st March or 1st January to 31st December, but they can differ depending on the business needs (e.g. education normally run from September to August). If someone joins or leaves part way through a holiday year, they will receive holiday on a pro-rata basis.

See calculating holidays for further details. This will also cover part-time holidays.

Holiday Rules

You need to have clear rules around holidays; from how to request and authorise holidays, payment of holiday when someone leaves, allocating holiday (e.g. a shutdown at Christmas), carrying forward holiday to the next holiday year etc. 

See Holiday Rules and Policy for further information.