Carry-over of annual leave

Carry-over can come from the contract or the law

An employer can agree that some unused holiday moves into the next leave year. The contract or holiday policy should say how much can move, whether approval is needed and when the carried balance must be used.

Statutory carry-over can also apply even when the ordinary policy says unused leave expires. Important situations include sickness, statutory family leave and cases where the employer did not properly enable the worker to take their leave. The Acas carry-over guidance explains the current Great Britain rules.

“Use it or lose it” is not the whole rule

In Great Britain, employers should give workers a genuine opportunity to take statutory leave. That includes recognising the entitlement, encouraging leave and making the risk of expiry clear. Under the Great Britain rule, a balance should not simply disappear at year end when the employer has not done what the relevant duty requires.

Sickness and statutory leave have their own carry-over treatment. Keep them separate from a discretionary policy allowance, because the source, amount and deadline can differ.

Keep balances labelled by their source

Do not merge carried statutory leave, current-year statutory leave and extra contractual leave into one unexplained number. A labelled balance helps managers apply the correct expiry and helps payroll reconcile what remains when employment ends.

Great Britain and Northern Ireland operate under separate legislation. Check the applicable official guidance before setting a statutory deadline, and keep contractual enhancements clearly identified as contractual.