Do Holidays Carry Over Into the Next Year?

Sometimes, yes. But the default answer is no, and understanding the difference matters.

Employees are entitled to 5.6 weeks of statutory annual leave per year. The general rule is that leave should be taken within the leave year it's accrued.

If it isn't, it doesn't automatically roll over. Use it or lose it is a legitimate position for an employer to take, provided you've made it clear in writing and given employees a reasonable opportunity to take their leave.

That last part is important.

When holiday carry-over is not allowed

If an employee simply chose not to take their holiday and you've given them reasonable opportunity to do so, you're within your rights to let it lapse at the end of the leave year.

You're not obliged to pay it out (which is generally unlawful) or carry it forward. Make sure your contracts and holiday policy are clear on this - if they're not, you're on shakier ground.

When carry-over is a legal right

There are specific situations where employees are legally entitled to carry holiday over, regardless of what your policy says.

Sickness is the main one. If someone has been too ill to take their holiday during the leave year, they have the right to carry it over. For statutory leave, they have up to 18 months from the end of the leave year in which it accrued to take it. You can't simply let it lapse because the year has ended.

Maternity, paternity, and other family leave works similarly. Employees on family-related leave who couldn't take their holiday during the leave year are entitled to carry it over into the next one.

The sick-during-holiday scenario we covered separately also falls into this category - days reclassified as sick leave may need to be carried over if there's no time left in the leave year to retake them.

The two-week rule

It's worth knowing that the 5.6 weeks of statutory leave isn't all treated equally. The first four weeks (derived from the EU Working Time Directive) carry stronger protections, including the carry-over rights above.

The additional 1.6 weeks has slightly different rules.

If you offer contractual leave above the statutory minimum, your contracts will govern what happens to that element.

What this means in practice

Keep track of leave balances through the year and flag anyone who's carrying a significant balance before the leave year closes.

A reminder in the final quarter gives employees time to book what they need and gives you the opportunity to manage the business around it. Letting large balances accumulate and then dealing with a carry-over dispute is avoidable with a little forward planning.

If your holiday policy doesn't clearly set out your leave year dates, your carry-over position, and the process for requesting leave - it needs updating. These are the foundations, and gaps in them create unnecessary problems.

We can help you get it right if you need us.

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