How much holiday should you offer your employees?

Thanks to UK employment law around holidays, employees are entitled to time off from work.

As an employer, it can be hard to decide how much holiday to offer staff to ensure you’re in line with legal requirements and offering a competitive and attractive proposition.

Below we’ll take a look at holiday entitlement and the different types of staff leave and help you decide how much holiday you should offer employees.

What is holiday entitlement?

Holiday entitlement refers to the amount of paid time off an employee has a legal right to in the UK.

More commonly known as annual leave, holiday entitlement can differ from employee to employee and from company to company.

How much holiday entitlement you offer staff will depend on various factors including whether they are part-time or full-time and your company policy.

What is the legal holiday entitlement in the UK?

In the UK, there is a legal minimum holiday entitlement for all employees.

The legal entitlement is 5.6 times the number of hours or days that a staff member works in a week. For example, an employee who works 5 days per week would be entitled to 28 days holiday.

28 days is the maximum statutory entitlement, so even if your staff work more than five days per week, their legal entitlement would still be 28 days.

How does holiday entitlement work?

Employers need to be clear on exactly how holiday entitlement and leave will work within their organisation.

Aspects that need to be covered within your holiday leave policy include:

• When does holiday entitlement reset? You will need to determine if your leave period is running from 1st January to 31st December or from a different date (for example some companies opt to run their leave period from 1st April to 31st March).

• Can employees carry over leave? If an employee doesn’t take all of their leave, can they carry over days to use in the next year? And if so, is there a limit to how many days that can be carried over and when they need to be taken?

• How do employees request leave? You need to set up a system for employees to request their leave. You’ll also need to decide who approves leave requests and how much notice staff need to give for time off.

• Are there times when leave cannot be taken? You may decide to implement a policy that means staff are unable to take time off during certain times, such as during the end of the financial year. If so, this needs to be clearly stated in your company policy. Some companies also set a limit as to how many staff can be off at any one time, operating on a first come first serve basis.

Holiday entitlement best practices

When it comes to deciding how much holiday entitlement to offer staff, there are various factors and best practices to consider.

You can opt to simply offer 28 days/the statutory minimum but if you want to attract and retain the very best talent, then it may be worth considering a more bespoke holiday policy.

Some of the options you could add to a holiday policy in 2024 to make you an attractive employer include:

• Unlimited leave. You read that right, some companies offer an unlimited holiday leave policy. This allows employees to take as much or as little leave as they wish throughout the year. One benefit of this can be that it prevents staff from having to take days off simply to use up their allowance. Not to mention, the added trust it can add to your employee relationships.

• Purchasing leave. Some employers allow employees to purchase additional annual leave. This is particularly useful for staff who may have a big holiday or life event such as a wedding planned. Most companies who offer this will have a limit as to how many additional days staff can purchase and will take the money out of their monthly wage.

• Workations. The idea of workations is growing in popularity. A workation allows an employee to work from anywhere, meaning they can take a trip or visit family abroad without using up their holiday allowance. If you already offer remote working then this may be something to consider.

• Different leave days. Many employees are now looking for companies that offer more than just holiday leave. Other leave that may attract talent include mental health days, education days (days where staff can complete relevant courses instead of working) and sabbaticals.

Benefits of generous holiday packages

Offering a generous holiday package above the statutory minimum can provide various benefits for your company.

First of all, it can sway the best talent to your company over your competitors. Post-pandemic workers are looking for jobs that offer a work/life balance, and holiday allowance is a huge part of that.

Encouraging staff to take time off and use up their leave can also ensure your workers are refreshed, relaxed and well-rested. Staff wellbeing should be right at the top of your priorities in 2024 and beyond.

Ensuring your staff have a generous amount of holiday to take can also help prevent unauthorised absences or additional days off. When staff take authorised leave you can plan for their absence accordingly, something that’s much harder to do if staff are forced to take last-minute days off or sick days.

Showing that you respect an employee’s time by offering them a good leave allowance can also help to foster a positive organisational culture. If you value their time, employees will value yours and put the effort into being productive during working hours.

Holiday allowance is also a great “trick” to have up your sleeve during the recruitment process. If you can’t up your proposed salary any more, you may be able to up your holiday allowance offer to a prospective employee, encouraging them to take the job.

Holiday entitlement: final thoughts

Holiday entitlement is a legal requirement for UK businesses however it doesn’t need to cause you a headache.

Simply take the time to put together and implement a solid holiday policy and ensure you communicate this clearly to all employees.

How much holiday you decide to offer your staff depends on your individual business, but by being generous and offering flexibility, you stand a better chance of attracting and retaining the very best talent.