Top tips to help manage your staff holiday entitlements more effectively.



In our 20 plus experience of working with HR Professionals, we have found that calculating and managing employee holiday entitlements is one of the most commonly contentious and administratively time-consuming tasks that effects, HR, Managers and employees alike.

For many companies, January is when employees holiday entitlements are recalculated, and employees start booking holidays for the new holiday. This means January can be a busy time of year for the HR department.

Here are our top 3 things to consider making things easier keeping on top of holiday entitlements.


1. Being clear and up front about what each employee is entitled to and calculating it correctly.

Did you know that all employees in the UK are entitled to a minimum of 5.6 weeks annual leave per year? Part Time employees are entitled to a pro-rated amount of annual leave depending on how many hours or days they work (usually calculated as their Full Time Equivalent or FTE). Whether employees must take Bank Holidays as part of this entitlement is at the discretion of the company.

Often, calculating the actual entitlement can be more complicated than this as companies usually offer additional incentives in order to recruit and retain staff.

  • Increased entitlement based on length of service
  • Carry Over of unused days from previous year
  • Buy back or selling of holidays scheme
  • Time off in Lieu Scheme
  • Birthday Allowance

Many employee grievances are caused by the miscalculation of holiday entitlements. Making employees aware of what they are entitled to is key and it is therefore important that this is included in the Contract of Employment (including any of the additional incentives mentioned above).

At the start of each holiday year employees need to be aware of how many days or hours they are entitled to. This needs to be calculated correctly to avoid any grievance later in the year, especially if the employee has taken more than they are actually entitled to.

Additionally, it is useful to make employees aware of what days Bank Holidays fall on for the current year and which of these have to be taken as part of their entitlement. This includes any periods of company shutdown such as over the Christmas period, so these can be factored into their decisions when booking holidays.

2. Make the booking and approval process quick and easy.

Historically this has been done via a Holiday card where the employees holiday record showing their entitlements and bookings are kept on a paper form. To book a holiday, the employee will need to get their Holiday Card from HR and add their holiday booking. This then will need to be taken to a manager for approval. Finally, HR will need to update the entitlement on the card and possibly update this onto a spreadsheet.

Not only is this extremely time consuming for all parties, but it is also open to issues such as miscalculating entitlements. This could result in a number of issues such as, too many team members booking holiday on the same dates; problems recalculating entitlements when employees withdraw requests, delays in approving holidays due to the manual process involved.

Making this process easier, quicker and more accurate can provide organisations with significant savings though reducing time spent by employees, managers and HR on calculating and managing holidays. This can be achieved by introducing an electronic system for calculating, booking and approving holidays where the savings this can make far outweigh the costs to implement such a system.

3. Keeping on top of how many days each employee is entitled to this year.

Keeping employees informed of the balance of their entitlement throughout the holiday year is just as important as at the start of the holiday year.  Managers also need to be aware of the remaining balances of their teams on an ongoing basis.

This is useful to avoid any issues or discrepancies often associated with manually tracking entitlements. An added benefit is that this can encourage employees to take their allocation throughout the year rather than leaving it towards the end of the holiday year.

This could be achieved by providing a monthly balance report to employees and managers which can be extremely useful yet time consuming to produce and issue. A more efficient and cost-effective option would be to provide an electronic holiday management system that employees and managers can access to book and approve holidays themselves as well as to view ongoing holiday balances as and when required.

Many electronic systems also provide access to a team holiday calendar to show when other team members have booked their holidays to avoid everyone booking the same dates thus leaving managers short staffed.



There are many methods for calculating and managing employee holiday entitlements, but many companies are still using inefficient paper based systems which are open to miscalculation and therefore lead to disgruntled employees and/or employers.

Adopting a suitable electronic HR system that manages this for you doesn’t have to be expensive or difficult to use. Not only can it save you significant time and money it also helps keep your employees informed and can empower your managers making for a happy and productive workforce.


About PeopleFirstHR

PeopleFirstHR are providers of best selling, all-in-one HR Software Solutions. We have been working on HR software systems for over 20 years and pride ourselves on providing the best software, support and Customer service for our users.

If you would like to learn more on how we can help your organisation please contact PeopleFirstHR on 01242 663974 or via email