Annual Leave Policy template
An annual leave policy is the written set of rules for how paid holiday works at your organisation — how much leave people get, how the leave year runs, how holiday is booked and approved, and what happens to untaken days at year end and when someone leaves.
Without a written policy, holiday becomes a series of ad hoc negotiations: the December pile-up, the two colleagues who booked the same week, the leaver who disputes their final pay. A clear policy applied the same way to everyone prevents most holiday disputes before they start.
This template gives you a complete, ready-to-edit policy: entitlement and the leave year, booking and approval rules, bank holidays and shutdowns, carry-over, sickness during leave, and how entitlement works for joiners and leavers.
Full text, ready to adapt.
Highlighted fields are placeholders — replace them with your organisation's specifics. A starting point, not legal advice.
Annual Leave Policy
Policy · HR & People
1. Purpose and scope
This policy sets out how paid annual leave works at {{org.name}}. It applies to all employees and workers, including part-time and fixed-term staff. Where an individual contract gives more generous terms, the contract applies.
2. Entitlement and the leave year
The leave year runs from [start date] to [end date]. Full-time staff receive [number] days' paid annual leave per year, [including / in addition to] bank holidays — never less than the statutory minimum of 5.6 weeks. Part-time staff receive the same entitlement pro rata, calculated on [method, e.g. hours worked].
Staff who join or leave part-way through the leave year receive a pro-rata entitlement calculated from their start or leaving date.
3. Booking and approval
- Request leave through [system/form] at least [number] weeks in advance — longer for absences of a week or more.
- Leave is not confirmed until approved by [line manager/role]. Do not book travel before approval.
- Requests are considered in the order received. Where too many overlap, [line manager/role] decides based on operational cover, rotating priority for popular weeks year to year.
- No more than [number] people from [team/department] may be on leave at the same time.
- During [busy periods, e.g. peak trading, year-end], new leave requests need approval from [senior role].
- {{org.name}} may refuse a request or, exceptionally, require leave to be taken on set dates, giving as much notice as possible.
4. Bank holidays and shutdowns
[State your position: bank holidays are taken as leave on the day / included in the annual entitlement and bookable like any other day / worked with time off in lieu.] Staff who work bank holidays as part of their normal pattern receive [arrangement].
[If applicable:] {{org.name}} closes between [dates, e.g. Christmas and New Year]. Staff must reserve [number] days of their entitlement for this shutdown.
5. Carry-over and payment in lieu
Leave should be used within the leave year it is earned. Up to [number] days may be carried into the next leave year with the written approval of [role], to be used by [date]. Statutory carry-over rights can also arise where someone could not take leave because of sickness or family-related leave — these are honoured in line with current official guidance.
Statutory leave is never paid instead of being taken, except for accrued untaken leave when employment ends.
6. Sickness and other leave
A member of staff who falls sick during booked annual leave may ask to reclassify those days as sickness absence, provided they report the sickness in line with the absence policy and supply the evidence it requires. The reclaimed holiday is rebooked for later in the year.
Annual leave continues to accrue during sickness absence and family-related leave such as maternity, paternity, and adoption leave.
7. Joiners and leavers
New starters accrue leave from their first day and may [book freely / book once accrued / book with manager discretion during probation]. Leavers are paid for accrued untaken statutory leave in their final pay.
Where a leaver has taken more leave than they accrued, {{org.name}} will recover the excess from final pay only where the contract or a written agreement permits it.
8. Records and review
Leave balances, approvals, and carry-over agreements are recorded in [system] and retained for [period]. [Role] audits balances [frequency, e.g. quarterly] and flags anyone at risk of losing untaken leave.
This policy is reviewed [frequency, e.g. annually] and whenever entitlement, the leave year, or relevant law changes. Owner: [name/role]. Next review due: [date].
How to adapt this template.
Decide your real entitlement and leave year first — check every contract and written statement says the same thing before publishing the policy.
Choose one bank holiday approach and delete the alternatives in brackets; a policy that hedges gets interpreted differently by every manager.
Set the concurrent-absence cap per team based on genuine minimum staffing, not a guess.
Fill every [bracketed placeholder] and remove any section that does not apply, such as shutdowns.
Brief every approving manager on the rules so first-come-first-served is applied the same way everywhere.
Set the review owner and date before publishing, and load balances into [system] so records match the policy from day one.
Turn this template into trained, proven behaviour
A policy in a drawer proves nothing. In TrainedTeam this template becomes assigned training with knowledge checks, e-signature acknowledgments, version history, and an audit-ready record of who completed what, when.
Annual Leave Policy template FAQs
Is an annual leave policy a legal requirement in the UK?
The policy itself is not required by statute, but the entitlement is: the Working Time Regulations 1998 give almost all workers at least 5.6 weeks' paid leave a year. A written policy is how you administer that entitlement consistently and evidence it if challenged.
Can bank holidays count towards the statutory minimum?
Yes. The 5.6-week statutory minimum — 28 days for a five-day week — can include bank holidays. There is no separate statutory right to take bank holidays off; it depends on the contract.
Can we pay staff instead of letting them take holiday?
Not for statutory leave. Statutory annual leave must be taken, not sold back — the only exception is accrued untaken leave paid when employment ends. Contractual leave above the statutory minimum can be handled however the contract allows.
Can an employer refuse a holiday request?
Yes, for operational reasons, provided the refusal is consistent with the policy and the worker can still take their statutory entitlement within the leave year. Give as much notice of refusal as possible and offer alternative dates.
What happens to unused holiday at the end of the year?
By default it is lost unless your policy allows carry-over or a statutory carry-over right applies — for example where sickness or family leave made it impossible to take. Track balances through the year so nobody arrives in the final month with weeks unused.
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