Annual leave policy

An annual leave policy is there to make it clear what your team is entitled to and how to arrange time off in a fair and consistent manner. Having a policy that your team can refer to brings visibility to the system and helps avoid conflict.

Download our completely free template

How to use the template

Once you have downloaded the annual leave policy template please have a detailed read through and fill in any blanks.

It’s vital to check the template carefully and make any changes necessary to align it with your existing policies and procedures.

You must be certain that you’re complying with relevant employment law. If in doubt we suggest getting help from an employment law specialist.

What’s included?

This annual leave policy covers annual holiday entitlement, how to arrange it with the agreement of your manager, carry over to the following year and how it interacts with other absence types.

It also has a statement on what happens at the end of employment, this will need aligning to your employment contracts.

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The Policy Wording

Annual Leave Policy

Purpose and scope

We encourage all employees to take their full contractual allowance to annual leave. The purpose of this policy is to set out how to agree absences with your manager and how the Company will deal with requests in a fair and consistent manner.

This policy applies to all employees. This policy does not form part of our employment contracts and we may amend it at any time.

Company holiday year

The Company’s holiday year runs from[1 January to 31 December].

Annual leave allowance

Your Annual Leave allowance is confirmed in your contract of employment.

During your first and last year of service your annual leave allowance will be reduced accordingly on a pro rata basis.

Booking annual leave

Annual Leave must be arranged in advance of the period of absence. This gives the company time to ensure workloads can be properly covered during your absence or that it doesn’t clash with an important colleague.

You will need to obtain approval from your manager, by[making a request within Timetastic/completing a leave request form].

If you are off work without first obtaining approval from your manager it will be treated as an unauthorised absence.

The Company will make every effort to accommodate your request for holiday. To be fair to all employees, requests will be dealt with on a first come first served basis, and subject to the operational needs of the company.

Extended periods of annual leave

Extended periods of absences can be more difficult for the company to organise around operational needs, please discuss with your manager if you would like to take time off greater than[insert time period]weeks.

Carrying over annual leave

For the purposes of maintaining a healthy work / life balance you should aim to take all your annual leave during the year in which it is earned. Where this is not possible the company will allow you to carry forward[insert number of days] days until the next year.


You must take your annual leave during the holiday year in which it accrues. Any unused annual leave at the end of the holiday year will be forfeited. No payment will made for any unused annual leave entitlement at the end of the holiday year except on termination of employment.

If you’re unable to take your full allowance in the year due to already being off work from sickness, injury or maternity then in line with legal requirements you may be able to carry this forward into the following year.

Sickness absence and holidays

If you are sick during a period of approved holiday leave, any days covered by a medical certificate may be converted to sickness absence and your holiday entitlement credited for the affected days. Our Sickness Absence procedures will still apply and failure to comply with this procedure may result in you forfeiting the right to have your holiday reallocated to be taken at another time.

Family leave and annual leave

For the purposes of this policy, family leave includes: maternity leave; paternity leave; adoption leave; parental leave; and shared parental leave.

You will continue to accrue annual leave as normal during periods of family leave.

At the end of your employment

The Company may require you to take any accrued but untaken annual leave allowance during your notice period. Alternatively, the Company may pay you in lieu of any unused annual leave accrued during the current holiday year. This can be agreed at the time.

[NB: INSERT THE FOLLOWING CLAUSE ONLY IF YOUR CONTRACTS OF EMPLOYMENT ALLOWS FOR DEDUCTIONS FROM PAY:] If, on termination of your employment, you have taken more annual leave than accrued in that holiday year, the Company is entitled to deduct the value of the unearned annual leave from any final payment of salary to be made to you.