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How to Calculate Annual Leave

Updated: Jan 20, 2021

Insights by PayFit

Holidays, ey? Time off away from the office (or more recently our dining rooms tables), away from our company’s personal communication platform, perhaps time spent on a sunny beach with an ice-cool beverage… Okay, we understand - coronavirus may have put a stop to some of our more exotic holiday plans; however, one of the side effects of the pandemic has been the amount of holiday that we can all carry over into next year. In this short piece, we will run through how holiday entitlement is calculated as well the impact of coronavirus on holiday carry over.


How much annual leave do we typically get?

How much holiday entitlement someone receives is normally set out in their employment contract.

Most workers with fixed-hour contracts are entitled to a minimum of 5.6 weeks' annual leave per year, is always capped at 28 days paid unless a company offers additional paid annual leave. Bank and public holidays can be included within the 5.6 weeks.

For each hour a person works, they must accrue a minimum of 12.07% as annual leave. For example, if a zero-hour worker has worked 93 hours during a month, they will be entitled to 11.23 hours of annual leave.

How much annual leave can an employee carry over?

Here’s where everything gets very interesting. In a typical year, an employee must take all of the EU statutory leave (four weeks’) during the leave year. If they don’t, it will be lost. The 1.6 weeks’ (or eight days if an employee works full-time) which the UK adds to this statutory leave may be carried over if agreed with the employer. However, this is not an automatic right. The coronavirus pandemic has forced the Government into introducing a temporary new law that will allow employees to carry up to four weeks' paid holiday (in line with the Working Time Directive) into the next two holiday years. The law will apply for any holiday that the employee does not take because of issues related to coronavirus, including: Missing out on holiday due to self-isolation or being too sick to take leave before the end of the year.

If an employee continues to work and is unable to take paid holiday. If an employee has been furloughed and has not had the time to take holiday within the allocated time. This carry forward legislation change does not apply to the full 5.6 weeks’ statutory entitlement, it only applies to the first 4 weeks statutory entitlement, but employers can choose to allow carry forward of the additional 1.6 weeks if they wish to.

Managing leaves with PayFit

PayFit is a cloud-based software provider that looks to automate payroll and HR tasks for small and medium businesses. The app has been designed to allow managers to easily manage their employees’ annual leave requests and entitlement. Calculations are made automatically based on employee holiday entitlement and the elements that directly impact payroll are automatically reflected on the employee's payslip. Employees can request leaves through the employee portal and have access to team calendars, meaning that they are able to see when their colleagues have booked time off and avoid taking annual leave at the same time.


If you would like to find out more about PayFit, or have any questions about the ways you can streamline your payroll and HR processes, then don't hesitate to book a demo of the PayFit platform today.


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