Holiday accrual

In the United Kingdom, holiday accrual refers to the process by which employees earn and accumulate paid annual leave entitlements over time, typically on a pro-rata basis according to their length of service or hours worked. This system allows employees to build up a bank of holiday days that can be taken at a later date.

Holiday accrual is usually calculated in accordance with the Working Time Regulations 1998 (WTR), which stipulate that all workers are entitled to a minimum of 28 days’ paid annual leave, inclusive of Bank Holidays. This entitlement increases to 5.6 weeks for full-time employees and is pro-rated for part-time staff.

In practice, holiday accrual typically works as follows:

• Employees earn a certain number of holiday hours or days per year, based on their length of service or hours worked.
• These accrued holiday hours or days are added to the employee’s holiday balance over time.
• When an employee takes a holiday day or uses a banked holiday hour, it is deducted from their total accrual balance.
• Employees can carry forward any unused holiday entitlement at the end of each year, subject to a maximum cap (usually 20 days).
• If an employee leaves their job, they are typically paid out for any accrued but untaken holiday entitlement.

Holiday accrual is often managed through HR systems and software, which track employees’ holiday balances and provide reminders when leave is due. This helps ensure that employees receive the correct amount of paid annual leave and that employers comply with relevant employment laws and regulations.

AceRota’s automated holiday accrual system ensures employees receive correct entitlements, preventing under- or over-accrual, which can lead to disputes and financial discrepancies. It also streamlines the process of tracking and managing employee holidays, making it easier for HR teams to manage staff leave.