Annual leave and PTO policy template for UK employers

Almost all workers in the UK are entitled to 5.6 weeks of paid holiday a year, which is 28 days for someone on a five day week. Part-time workers get the same 5.6 weeks, worked out on the days they work.

A policy covers everything the law leaves open. That includes whether bank holidays count towards the total, how much leave can be carried over and how employees book time off.

The template sets out entitlement, accrual, carry over, holiday pay and booking, with a guidance note against every clause that needs a decision.

What the law requires

Annual leave or PTO

PTO, or paid time off, is the term some employers use for annual leave. The legal minimum is the same either way.

Some employers also fold sick days into PTO. The template keeps sickness separate, because statutory sick pay has its own rules.

What a policy needs to cover

• Leave year. State the dates, so everyone's entitlement runs on the same cycle.
• Entitlement. Give the number of days and say whether bank holidays are included.
• Part-time and irregular hours. Say how leave is worked out for people who don't work a standard week.
• Joiners and leavers. Set how leave builds up in the first year and what happens to unused leave on leaving.
• Booking. Name who approves, how much notice is needed and how clashes are settled.
• Carry over. Set a cap and a deadline, and cover the cases where the law requires carry over.
• Holiday pay. Make clear that regular overtime and commission count.
• Records. Keep leave and holiday pay records for at least six years.

What is changing

Since April 2026, employers have had to keep holiday and holiday pay records for at least six years. The Fair Work Agency was set up in April 2026 and is due to start enforcing holiday pay rights in 2027.

Common mistakes

• Leaving out part-time and irregular hours workers
• Not stating the leave year
• Counting bank holidays towards the total without saying so
• Setting no cap or deadline for carry over
• Forgetting that regular overtime and commission count towards holiday pay
• Not recording the leave people take

FAQ

How many days of annual leave must UK employers give?

Almost all workers get 5.6 weeks of paid holiday a year, capped at 28 days. That is 28 days for someone on a five day week, including bank holidays if you count them.

Can bank holidays count towards annual leave?

Yes. Employers can include them in the 5.6 weeks, so a policy should say whether they are included.

How does holiday entitlement work for part-time and irregular hours staff?

Part-time workers get 5.6 weeks based on the days they work. Irregular hours and part-year workers build up leave at 12.07% of the hours they work.

Can employees carry holiday over to the next year?

The law requires it in set cases, such as after family-related leave or long-term sickness. Any other carry over is up to your policy.

What happens to unused leave when someone leaves?

Unused statutory leave is paid in the final pay. An employer can only deduct for leave taken beyond what was accrued if a written payback clause was agreed beforehand.

What is the difference between annual leave and PTO?

PTO is the term some employers use for annual leave. The legal minimum is the same either way.

Should a policy offer a flat number of days or build leave up over time?

Either works if the policy says which. The template lets you choose, with a guidance note for each option.

How much notice do employees need to give to take holiday?

By default, twice the length of the leave they want, unless the contract says otherwise. A policy can set different notice periods.

Does holiday pay include overtime?

Yes, where the overtime is regular. Holiday pay is based on normal pay, which includes regular overtime and commission.