Holiday entitlement guide overview


Managing staff holiday entitlement can be one of the biggest headaches for small businesses. With a smaller number of employees to deal with, it can be hard to cover absences and carry on as normal, especially if your workers are all clamouring to be off at once.

How do you make sure you’re giving them the holiday they deserve but still maintain essential cover so your business doesn’t suffer? What happens if multiple employees want to take time off at the same time? And how do you handle it if there are certain times of the year when holidays just simply aren’t possible?

Thankfully, there are plenty of sensible answers available to all these questions and more which can help you to get your holiday management under control.

What is holiday management and why is it important to have a handle on it?

It’s vital to keep on top of staff holidays, not just from a business functioning perspective but for your employee’s wellbeing. Staff need a break to avoid burnout and a holiday can leave them feeling refreshed and far more productive than if they don’t take them. It also helps reduce illness and absenteeism if staff are given the appropriate time off.

Some staff will make sure they take all the leave they are entitled to while others may prefer to work and you will have to make sure they take time out. Regardless, as a business owner or HR manager, it’s your job to make sure holiday entitlement is dealt with properly.

How much holiday time should I give?

By law, you’re required to give staff a certain amount of time off every year which depends on a number of factors. Currently, a member of staff who works five days a week is entitled to 5.6 weeks’ annual leave which equates to 28 days. If they work part-time, then rate is a pro-rata one of the full-time rate.

For example, if someone works three days a week it is 3 x 5.6 = 16.8 days and then rounded up to the nearest full day. If an employee starts mid-year you will also need to calculate their holiday rate on a pro-rata basis.

holiday entitlement allowance-minThe statutory entitlement is capped at 28 days so even if you work six days a week you will still only get 28 days, the same as working five days a week.

For casual workers who have different hours each week the entitlement calculations can be even more complex and you can find out about holiday calculations here.

Bank holidays can be included in the annual entitlement and it’s up to you whether you give staff those days off in addition to their holiday allowance or included in it. Holiday entitlement should usually be taken in the leave year. You might decide to allow staff to carry over some holiday or have a policy where it is lost if they don’t use it up. However, four weeks of that entitlement (the amount set under the EU Working Time Directive) must be used up in the leave year.

As an employer you may choose to offer enhanced holiday entitlement, details of which you should include in any contract of employment and/or employee handbook.


Holiday allowance calculator

Taking the pain out of calculating holiday allowances for your employees.


Policy and process

Creating a holiday policy

It’s a good idea to have a written holiday policy which details holiday staff are entitled to, what happens with bank holidays, the maximum amount of time that can be taken in one particular period, how staff apply for holiday through an automated system, when the holiday year runs e.g. January to December or April to March, the notice period employees are required to give and whether holiday accrued can be carried over to the following year.

It’s also important to have in place the same process for all staff so there can be no accusations of unfair treatment or requests going missing. In addition, you can specify certain times of the year when holiday may not be taken, particularly if your business is seasonal and you have busy periods in the summer or Christmas when customer demand is high. Some companies may have a shut-down period where the entire workforce or majority of the workforce has to take a holiday such as week over Christmas.

Additionally, you can include caps on holiday such as the maximum number of staff who can take holiday at any one time in each team, department or across your entire business.

Creating a policy will aid your streamlining process because there is no argument then, no question over how things are calculated and much less chance of errors being made.

Streamlining through automation

Planning who is off and when can leave you in knots, or at least struggling with complex spreadsheets. Automation makes perfect business sense, making the process much easier to manage and much faster. If you don’t automate, it will simply take longer to organise and could in effect be more costly for your business.

In 2017, Ryanair cancelled as many as 50 flights a day for six weeks after admitting it had messed up its pilots’ holiday planning. The result was a lot of disgruntled airline passengers, lost revenue a potential €20m compensation bill and a serious hit to Ryanair’s reputation.

Even John Lewis, a company that regularly ranks highly as a great employer, had to pay out £40m in compensation to 69,000 workers when it wrongly calculated their holiday entitlement.

But by automating holiday booking you can avoid such disasters. Automation gives you a helicopter view of the business and make sure you don’t end up in a Ryanair situation with everyone taking leave at once. The software will automatically calculate entitlement and keep tabs on who has taken what and when.

Automation can also help avoid the end of year holiday rush that occurs in a lot of organisations. By allowing managers access to up to date holiday information, employees can be encouraged to take holiday throughout the year. This can be vital if there are minimum resources you need in place or certain times of the year when you are very busy.

It’s also better for your staff as well if the process of booking holiday is quick and easy – there is nothing worse than having to wait weeks to find out if a request has been authorised when there are plane tickets and hotels you’re waiting to book.

Managing the booking/approval process

The major problem with sticking to a paper or manual system is it’s incredibly time- consuming and hard to keep track of.

If you’re still using an office wall chart or excel sheet, holidays can easily be left or put in the wrong place, creating problems for you down the line.

Using a holiday management system can eradicate a lot of the uncertainty as well as save you valuable time which can be better spent elsewhere on the business.

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The benefits

There are numerous benefits to both employer and employee in implementing a holiday management system, here are just a few.

Employer benefits

  • Delegation

You can hand over responsibility for organising holiday and work rotas to your employees’ direct line managers which frees up your time to concentrate on running the business.

  • Instant notification

If an employee makes a holiday request you will know about it straight away through an instant email notification system so there is no chance of the request going missing.

  • Simple approval

Much automation software provides a one-click approval process, which means no more having to cross-reference the dates on the wall calendar.

  • Central Calendar

A single calendar makes it easy to see who is off and when.


Employee Benefits

  • Easy use

The self-service nature of automated software means your employees can apply anywhere at any time

  • Notification

Just as you will receive their requests via an email notification system they will receive responses to let them know if their holiday has been approved or rejected

  • Quicker

Employees can find out much faster whether they have been granted leave or not.

Keeping track

Keeping tabs on who is off and when is essential to the smooth running of your business but if you don’t it can create a number of problems for you.

Too many staff off

Too many people off at the same time can leave you short-staffed and struggling to cope – this can impact productivity, customer relationships and ultimately profits. The solution is to manage holiday entitlement throughout the year and ensure a maximum number of people on leave at any one time. The minimum functioning level of staff will vary according to your business needs but you can set it and include it in your holiday policy.

Plenty of people still use wall charts and coloured stickers or Excel spreadsheets to keep track. But this can get confusing and things can be missed. Automating the process allows you to be seen readily if there is a clash of maximum number exceeded.

Holiday overload

40 percent-minIf you don’t keep an eye on holidays you can end up in a situation where some staff haven’t taken much holiday at all. Not only does this create headaches at the end of the year it can leave staff suffering from burnout. Research commissioned by firm travel Airtours in 2016 found 40% of the British workforce didn’t take the full holiday entitlement in a given year. Everyone knows that one person who is a workaholic and never takes time off but as the boss or manager it’s your job to ensure they stagger holidays regularly so they are getting the rest they need to remain fully productive.

The same research revealed 25% of those asked didn’t need or want to take time off but 80% of employees who did use up all their leave said it had a positive impact on morale and productivity.

End of year holiday rush


If staff don’t use up holiday throughout the year you can reach a situation where too many of them have leave to use up before the accrual year is up. If they have statutory Working Time allowance left to take it has to be used up – you can’t pay them in lieu of holiday. This can leave you short-staffed in order to fulfil your statutory obligations.

Being able to clearly see your employee holiday allowances in an online system at a glance helps avoid this problem. You can quickly establish who should be encouraged to take more leave well before the end of the year. And sending out periodic reminders can reduce the problem. It’s also important to run regular reports to see who has holiday remaining and make it part of your monthly tasks so you’re not caught out.

The end of year process

Mishandling the end of year holiday requests can cripple your business if you’re not careful. It’s probably the only time of year you’ll face a barrage of requests for time off and if you don’t get it right it can even impact your company culture and employer brand, not to mention leaving you with disappointed employees.

Plan in advance

Using automation software to plan in staff holiday can reduce the risk of any difficult clashes. There’s no reason why you can’t get your staff to schedule their holidays throughout the year so you’re never left with any glaring holes and then input them into the system so you’re always covered.

If you don’t plan in advance, and particularly if your holiday year end is December, you can be faced with an onslaught of requests for the festive period. For some businesses this is a time to plan for the coming year while for others, such as those in retail, it can be one of the busiest times when you need all your staff not less.

Anticipate clashes

If you’re regularly monitoring the system you’ll see potential clashes before they cause a major problem. Keeping accurate records of remaining entitlement lets you see who has already taken plenty of holiday and who has yet to do so. If it’s just one employee it may be okay but if you notice several with substantial amounts outstanding it could be problematic. The earlier you spot that and address it the better.

Manual vs. automation

If you’re still working out holiday entitlement manually it can be extraordinarily time- consuming. As well as figuring out the general entitlement at the end of the year it may be necessary to calculate how much time can be carried over as well as organise and distribute new allowances for each employee in the new year. If there is sick leave and maternity leave involved which means they haven’t taken their full entitlement it can get even more complicated. Throw in casual workers and irregular shifts for good measure and a substantial portion of your time can be spent on calculating holiday allowances.

Fortunately, automation can take much of the hard work out of this task by introducing a one-click process for dealing with requests, letting you see at a glance how many people you have off and when and also allowing you repeat the same holiday patterns and allowances from previous years.

It can save time and help reduce the risk of human error such as where employees might get too much or two little holiday entitlement. It also means you can do away with cumbersome wallcharts and complex spreadsheets and have the data stored in one safe, convenient place.

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