Starting a new business in the UK is exciting-but understanding holiday entitlement and statutory leave is essential from day one. From annual leave and sick pay to maternity, paternity, and neonatal care leave, here is what every first-time founder needs to support their team properly.
Starting a New Business? Get Leave Entitlement Right Early
When you are focused on hiring, sales, and delivery, leave policy can feel like an admin task to do later. In practice, it is one of the first compliance areas to set up properly.
Clear leave rules help you:
- meet your legal obligations,
- prevent payroll and accrual mistakes,
- set fair expectations with employees,
- reduce operational disruption when people are off.
Annual Leave: The Foundation of UK Holiday Entitlement
Most workers in the UK are entitled to 5.6 weeks of paid holiday each leave year.
For someone working 5 days per week, this is 28 days of paid holiday.
This generally applies to full-time, part-time, agency, irregular-hours, part-year, and zero-hours workers.
Can Bank Holidays Be Included?
Yes. Employers can include bank holidays within the 5.6-week statutory entitlement.
You do not have to offer bank holidays in addition to 28 days for a full-time worker, unless your contract or policy provides more generous terms.
28 Days Is the Statutory Cap
Statutory leave is capped at 28 days. Someone working more than 5 days per week does not gain statutory leave above this cap.
You can choose to provide enhanced contractual leave.
Calculating Leave: Common Founder Mistakes
1) Regular Full-Time Workers
Leave starts accruing from day one. Many employers track accrual monthly.
Example:
- 28 days per year,
- after 3 months, around 7 days accrued.
2) Part-Time Workers
They still receive 5.6 weeks, but in proportion to days worked.
Example:
- 3 days per week × 5.6 weeks = 16.8 days.
3) Irregular-Hours and Part-Year Workers
Holiday accrues in proportion to hours worked, and calculations must be handled carefully and consistently.
Practical tip: founders often reduce risk by using a dedicated process or tool rather than manual spreadsheets. If you are still considering spreadsheets, this guide to Excel leave trackers for small businesses can help you assess trade-offs.
Holiday Pay: More Than Basic Salary
Workers are entitled to a week’s pay for each week of statutory leave.
For workers with variable hours or variable pay, holiday pay is usually based on average pay across a reference period.
“Normal pay” may include regular overtime, commission, and relevant allowances depending on circumstances. Getting this wrong can create wage deduction and back-pay risk.
Maternity Leave and Pay
Eligible employees can take up to 52 weeks of maternity leave:
- 26 weeks Ordinary Maternity Leave,
- 26 weeks Additional Maternity Leave.
They must take at least:
- 2 weeks after birth,
- 4 weeks if they work in a factory environment.
Statutory Maternity Pay rules commonly apply as:
- first 6 weeks at 90% of average weekly earnings,
- next 33 weeks at the statutory rate or 90% of earnings (whichever is lower).
Paternity Leave and Pay
Eligible fathers or partners can take up to 2 weeks of paternity leave.
Statutory Paternity Pay is typically the statutory weekly rate or 90% of average weekly earnings, whichever is lower.
Shared Parental Leave (SPL)
Shared Parental Leave allows eligible parents to share leave entitlement where conditions are met.
It offers flexibility, but it is administratively detailed. You need clear notices, timelines, and records to manage it correctly.
Adoption Leave
Eligible employees adopting a child can take up to 52 weeks of adoption leave.
Statutory Adoption Pay generally mirrors maternity pay structure.
Sick Leave and Statutory Sick Pay (SSP)
Employees who are off sick may qualify for Statutory Sick Pay if eligibility criteria are met.
Employees continue to accrue statutory annual leave during sick absence, which founders often overlook.
Carer’s Leave
Eligible employees can take up to 1 week of unpaid carer’s leave in a 12-month period to care for a dependant with long-term care needs.
Neonatal Care Leave
Neonatal Care Leave has introduced additional rights for parents whose baby requires neonatal care, subject to eligibility and statutory conditions.
If you employ parents in your team, your leave policy should explicitly cover this.
Other Leave Types You Should Account For
You should also have clear policy wording for:
- unpaid parental leave,
- time off for dependants,
- jury service,
- public duties,
- parental bereavement leave.
Why Getting Leave Right Early Matters
In a small team, one person off can materially affect delivery and capacity. That makes clarity and consistency essential.
A robust leave process helps you:
- reduce legal risk,
- avoid avoidable payroll corrections,
- improve trust and transparency,
- keep team planning realistic.
If your workforce includes mixed patterns or multiple sites, this practical article on working patterns across locations covers considerations that often affect leave setup.
How SimpleLeave Supports First-Time Founders
SimpleLeave is designed to help growing UK teams manage leave in one place, with clearer records and fewer manual calculations.
You can use it to:
- track leave balances and requests,
- manage approvals consistently,
- keep a clear audit trail,
- reduce spreadsheet-driven errors.
If you are evaluating tools, review SimpleLeave pricing or create an account to test the workflow with your own policy setup.
Frequently Asked Questions
Do I have to give 28 days plus bank holidays?
No. Statutory entitlement for a full-time 5-day worker is 28 days, and this can include bank holidays.
Do employees accrue holiday while on maternity leave?
Yes. Statutory holiday entitlement continues to accrue during maternity leave.
Can I refuse a holiday request?
You can refuse specific dates where business needs require it, provided the process is fair and in line with legal notice rules.
Do I have to pay employees for jury service leave?
You must allow time off for jury service, but there is no general statutory requirement to pay full salary for that time.
Final Thoughts
Founders who set leave processes early are usually better placed to scale without compliance surprises.
If you want to simplify leave admin and reduce manual risk, contact the SimpleLeave team or start your free trial.
Disclaimer: This content is for general informational purposes and is not legal advice. Employment law and statutory rates change over time. Consider obtaining professional legal or HR advice for your specific circumstances.
