Carry Over Holiday UK: What Staff Keep and What They Lose

Someone on your team is sitting on a pile of untaken leave and the holiday year runs out in six weeks. The carry over holiday UK rules are tighter than most managers assume: the default position is that untaken leave is lost at the year end, and only part of the statutory entitlement can legally roll forward at all.

The version that bites in hospitality is always the same. The general manager who covers everyone else's requests, works through August because two chefs walked, and reaches 31 December with almost the whole 28 days untouched. Under a five-day carry over cap, they keep five and lose 23. That isn't a payroll mistake. It's what the policy says, and provided you handled a few things properly along the way, it's lawful.

Below: the split between the four weeks and the 1.6 weeks, the sickness and family leave exceptions that override your policy, what a workable pub policy actually looks like, and what your rota system should do on the night the leave year turns over.

Carry over holiday UK rules: what the law actually allows

Statutory holiday entitlement in the UK is 5.6 weeks a year, capped at 28 days for anyone working five days or more a week. What most managers don't realise is that this single number is two separate entitlements bolted together under the Working Time Regulations 1998, and they behave completely differently at year end.

The four weeks (regulation 13)

This is the EU-derived core of the entitlement, 20 days for a five-day worker. The general rule is blunt: it must be taken in the leave year it relates to, and it cannot be carried forward. It also cannot be paid in lieu while employment continues. If it isn't used, it's gone.

There are three exceptions, and only three. Leave untaken because of sickness absence can be carried, and must be used within 18 months of the end of the leave year in which it accrued. Leave untaken because of statutory family leave (maternity, paternity, adoption, shared parental, parental bereavement) carries into the following leave year in full. And leave untaken because the employer got in the way carries indefinitely, which is the one that costs money.

The 1.6 weeks (regulation 13A)

This is the UK's additional eight days for a five-day worker. Regulation 13A(7) allows it to be carried into the following leave year by agreement between worker and employer. "By agreement" is doing real work in that sentence: it means a written policy, a contract clause, or a case-by-case sign-off. It does not happen automatically, and it can only ever run one leave year forward.

So the legal ceiling on ordinary, voluntary carry over is 1.6 weeks. Eight days for full-timers. If your policy says five days, you're sitting comfortably inside the law. If your handbook promises fifteen, you've created a contractual right that goes well beyond statute and you'll have to honour it.

The exception that catches employers out

Following amendments made to the Working Time Regulations in 2023, where an employer has failed to recognise a worker's right to paid leave, failed to give them a reasonable opportunity to take it, or failed to warn them that untaken leave would be lost at the year end, that leave carries over and keeps carrying until it's taken or paid on termination. There's no 18-month backstop and no cap.

For hospitality this is the real risk. A GM who requested leave four times and was told "not this month, we're short" has a decent argument that they were never given a reasonable opportunity. A kitchen porter on a zero-hours contract who was never told holiday was paid at all is in stronger territory still. The defence is boring and documentary: a visible balance, requests on record, and a written warning before the year closes. Full guidance on the statutory position sits on the gov.uk holiday entitlement pages, and Acas covers the carry over scenarios in plain English.

What a carry over holiday policy looks like in a UK pub

Most independent pub and restaurant groups land on something close to the same shape, because it balances the operational reality (nobody wants five people taking February off at once) against the legal minimum.

• Cap at five days. Comfortably within the 1.6 weeks you're allowed to carry by agreement, and small enough that it doesn't wreck next year's rota.
• Use-by date of 31 March. Three months into the new leave year, before the Easter trade picks up, and it forces the conversation early.
• Manager approval required in writing. Carry over is a concession, not a default. If it's automatic, everyone banks days and January turns into a scramble.
• Carried days are used first. Any booking in January to March comes out of the carried balance before it touches the new year's entitlement.
• No payment in lieu. You can't buy out statutory leave while someone is still employed, so don't offer it as a fix.
• Sickness and family leave sit outside the cap. State this explicitly, because those carry rights come from the regulations and your policy can't shrink them.

The other half of a working policy is the calendar behind it. Balances reviewed at the end of September, written notice to anyone above half their entitlement by mid-October, and directed leave under regulation 15 for anyone still carrying a big balance in November. Regulation 15 lets you tell a worker to take leave on specified days provided you give at least twice as much notice as the length of the leave: two days' notice for one day off, ten days' notice for a week. Used early and politely, it clears balances without anyone losing anything.

Worked example: 28 untaken days on 31 December

The arithmetic only looks brutal when you write it down.

A 60-cover gastropub. Leave year runs 1 January to 31 December. Carry over capped at five days, use by 31 March.

The general manager is full-time, five days a week, entitlement 28 days including bank holidays. Two chef resignations in March and a summer of agency cover mean she books nothing all year. On 31 December her balance reads 28 days untaken.

Closing balance: 28 days.
Carried forward under the five-day cap: 5 days, expiring 31 March.
Lost at midnight on 31 December: 23 days.

Even if the policy had been written at the legal maximum, only 8 days (1.6 weeks) could have rolled forward, so 20 days would still have gone. The five-day cap costs her three extra days versus the statutory ceiling. The other 20 were never carryable.

The five carried days sit in a separate bucket. She books 27 and 28 February plus 1 March, leaving two. She doesn't book them. On 1 April the balance drops to zero and her 2026 entitlement of 28 days stands untouched.

Now the version where it goes wrong. If that GM had put in three leave requests in June, July and September, all declined on staffing grounds, and nobody ever sent her a written balance or warned her the days would expire, the four-week core (20 days) arguably carries over indefinitely. That's roughly £2,000 of liability on a £52,000 salary, sitting quietly on the balance sheet until she resigns and asks for it in her final pay. The difference between the two outcomes isn't the policy. It's whether you can show you gave her a real chance to take the leave and told her what would happen if she didn't.

Use it or lose it holiday: getting the message out before year end

"Use it or lose it" is legally accurate for most of the entitlement, but it only protects you if the losing part was communicated in advance. A quick note in the WhatsApp group in late December doesn't count as a reasonable opportunity to take twenty days off.

What works is a three-touch cycle. At six months in, every member of staff sees their taken and remaining figures, ideally on the same screen where they check their shifts. At three months out, anyone with more than half their entitlement left gets a written prompt naming the number of days and the date they expire. At six weeks out, the ones still carrying a heavy balance get dates proposed for them, with the regulation 15 notice period respected.

That cycle has an operational benefit beyond compliance. Holiday that lands in February and March is far cheaper to cover than holiday that lands in December, and if everyone's banked days come due at once you'll be paying agency rates to plug the gaps. Spreading the drawdown across a quiet quarter costs you almost nothing. Leaving it to chance costs you either cover money or a tribunal risk, and sometimes both.

Worth noting: the rules around holiday accrual for irregular hours and part-year workers changed for leave years starting on or after 1 April 2024, with accrual at 12.07% of hours worked and rolled-up holiday pay permitted for those workers. If you pay rolled-up holiday on casual contracts, carry over largely stops being a question for those staff because the entitlement is paid as it accrues. It remains a live question for everyone on fixed hours. Further changes to leave and pay administration are coming through the wider reform package, and we've covered what's landing in our rundown of the UK employment law changes due in April 2026.

What a rota system should do at the holiday year boundary

Most rota tools handle bookings well and year end badly. The day the leave year rolls over is the single moment where holiday data can silently go wrong, and once it's wrong you're reconstructing balances from spreadsheets and memory. Three things have to happen automatically.

Snapshot the closing balance

Before anything resets, the system should freeze a record of each person's entitlement, days taken, and days remaining as at the final day of the leave year. Not a report you have to remember to run. A stored, immutable record with a timestamp. This is what you produce eighteen months later when somebody disputes what they had left, and it's what turns an awkward conversation into a thirty-second answer.

Carry the capped amount as a separate balance

Carried days are not the same as new-year days. They expire, they should be consumed first, and they need their own line. If the system just adds five days to the new 28 and shows 33, you've lost the ability to expire anything, and you've quietly turned a concession into a permanent uplift. Sickness and family leave carry over should sit in their own buckets too, with their own dates: 18 months from the end of the accrual year for sickness, the following leave year for family leave.

Expire it on the use-by date

On 1 April, the unused portion of the carried balance drops to zero without anyone touching it. The audit trail records what expired and when. Managers get a warning at 60 and 30 days out listing every person with carried days still on the books, so the expiry is never a surprise. That combination of visible balances, dated buckets and automatic expiry is exactly what our holiday tracking and rota features are built around.

Paying carried-over holiday at the right rate

Carried days are paid at the rate in force when they're taken, not when they were accrued. A bartender who carries five days from 2025 into February 2026 and gets a pay rise on 1 January is paid the new rate for those five days. That matters more than it sounds in hospitality, where National Living Wage uprating in April means a March deadline and an April deadline produce different payroll numbers.

For anyone whose pay varies with overtime, commission or service charge, the four-week portion has to be paid at normal remuneration using a 52-week reference period, ignoring weeks with no pay and going back up to 104 weeks to find them. The additional 1.6 weeks can be paid at basic rate, though most operators pay everything at the same rate to avoid running two calculations. We've broken the whole calculation down in our guide to holiday pay for hospitality staff, including how tronc and tips feed into it under the Employment (Allocation of Tips) Act 2023.

This is general guidance, not legal advice. If you're dealing with a large accrued balance, a long-term sickness case or a dispute over declined requests, take proper advice before you write anything off.

Common questions

Can we pay staff for untaken holiday instead of carrying it over?

Not for statutory leave while someone is still employed. The Working Time Regulations only allow payment in lieu of the 5.6 weeks on termination. If your contract gives extra contractual leave above the statutory minimum, you can buy that portion out if the contract permits it.

Can an employer refuse a carry over request?

Yes for the 1.6 weeks, because that carry over only happens by agreement and you can decline it. You cannot refuse carry over where it arises from sickness, statutory family leave, or your own failure to give a reasonable opportunity to take the leave. Apply the discretionary part consistently across the team to avoid a discrimination argument.

How long can sickness-related carry over last?

Up to four weeks can be carried where sickness prevented the leave being taken, and it must be used within 18 months of the end of the leave year in which it accrued. After that it lapses. Record the expiry date at the point the leave is carried, not when the person returns.

What happens to carried holiday when someone resigns?

Accrued untaken statutory leave in the current leave year is paid in the final wage packet. Validly carried leave that hasn't expired is generally treated the same way. Leave that already expired under a lawful policy, with proper notice, isn't paid.

Do bank holidays affect what can be carried?

There's no automatic right to bank holidays off or to extra pay for them. If your contract counts the eight bank holidays as part of the 28 days, untaken bank holiday days are just part of the balance and follow the same carry over rules. If you give them on top, the extra days are contractual and your policy decides what happens to them.

Can we force staff to take their holiday before the year ends?

Yes, under regulation 15 of the Working Time Regulations 1998, provided you give notice of at least twice the length of the leave you're directing. Six days' notice for three days off. Use it in October and November rather than the last fortnight of December, when nobody can be spared anyway.

Does rolled-up holiday pay remove the carry over problem?

For irregular hours and part-year workers in leave years starting on or after 1 April 2024, rolled-up holiday pay at 12.07% means the pay is settled as it accrues, so there's no unpaid balance to argue about. Those workers still have the right to take the time off, so you should still be tracking days taken rather than just topping up the payslip.

If you're reconstructing holiday balances from a spreadsheet every December, the year end is where errors become expensive. RotaKeep snapshots every closing balance, carries the capped amount into its own bucket with a hard expiry date, and flags anyone still sitting on carried days 30 days before they lapse. See how it handles your holiday year end without a single manual calculation.