Annual leave is paid time off work. In the UK it is a legal entitlement, not just a perk, and getting the amount and the pay right is a common compliance issue for employers. Here is a plain-English guide for England and Wales under the Working Time Regulations 1998.
The statutory minimum: 5.6 weeks
Almost all workers (not just employees) are entitled to a statutory minimum of 5.6 weeks' paid holiday a year under the Working Time Regulations 1998. For someone working a five-day week, that equals 28 days a year, which is the maximum the statutory entitlement requires (5.6 × 5 = 28). Working more than five days a week does not increase the statutory minimum beyond 28 days, though a contract can be more generous.
Part-time workers get the same 5.6 weeks on a pro-rata basis. For example, someone working three days a week is entitled to 3 × 5.6 = 16.8 days.
Do bank holidays count?
There is no separate legal right to take bank holidays off. Bank holidays (usually eight in England and Wales) can be counted as part of the 5.6 weeks statutory entitlement, if the contract says so. So an employer can offer "20 days plus bank holidays" (28 in total) or "28 days inclusive of bank holidays", both can satisfy the law. The contract governs which.
Accrual and new starters
- Holiday accrues from the first day of employment.
- In the first year, many employers allow leave to accrue monthly (broadly one-twelfth of the annual entitlement each month).
- For irregular-hours and part-year workers, reformed rules applying to leave years beginning on or after 1 April 2024 calculate holiday based on 12.07% of hours worked, and allow rolled-up holiday pay for these workers; check the current method for your workforce.
Holiday pay
Holiday must be paid at the worker's normal rate of pay. For workers with variable pay (overtime, commission), holiday pay should reflect normal remuneration, typically averaged over a reference period. Getting holiday pay calculations wrong is a frequent source of claims.
Carrying over and "use it or lose it"
- Generally, the 4 weeks derived from EU-origin law and the additional 1.6 weeks can be subject to different carry-over rules; employers often operate a "use it or lose it" policy within the leave year, but must allow carry-over where statutory leave was not taken due to sickness or family leave, and also where the employer failed to properly recognise the worker's right to paid leave, give a genuine opportunity to take it, or warn that untaken leave would be lost.
- On termination, the worker must be paid in lieu of accrued but untaken statutory holiday.
Requiring or refusing leave
Employers can, with the right notice, require workers to take leave on particular days (e.g. a shutdown) or refuse a leave request, using the notice rules in the Working Time Regulations (or the contract).
Key takeaways
- The statutory minimum is 5.6 weeks (up to 28 days for a five-day week) under the Working Time Regulations 1998, pro-rated for part-timers.
- Bank holidays are not a separate right, they can be included in the 5.6 weeks if the contract says so.
- Holiday accrues from day one; irregular-hours/part-year workers use the 12.07% method (from April 2024).
- Pay holiday at normal pay (including variable elements), allow carry-over where required (e.g. sickness), and pay accrued untaken leave on termination.
Sources
- Working Time Regulations 1998 (5.6 weeks' statutory annual leave; accrual; notice to take/refuse leave; payment on termination)
- Reforms (from April 2024) for irregular-hours and part-year workers (12.07% accrual; rolled-up holiday pay)
- Case law on holiday pay reflecting normal remuneration (overtime/commission)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor or HR professional.