The Employer's Guide to UK Statutory Leave Entitlements

Managing employee leave shouldn't require a law degree. Yet here's the reality for most small-business owners: between annual leave, statutory sick pay, maternity, paternity, shared parental leave, and a roster of other entitlements, the rules are surprisingly complex. Add in part-time calculations, carry-over disputes, and the interaction between different leave types, and it's easy to see why so many employers get it wrong.

Getting it wrong costs money (underpayments, arrears claims, tribunal fees). Getting it right costs time upfront but protects your business, keeps your team confident, and keeps employment law from creeping up on you. This employer's guide to statutory leave entitlements covers every leave type UK employers are legally required to provide — and the practical rules that actually matter.

Annual leave: 28 days, whether you like it or not

Every worker in the UK is entitled to a minimum of 5.6 weeks of paid annual leave per year. For someone working five days a week, that's 28 days, bank holidays included.

Here's where most small businesses stumble: you can count bank holidays toward that 28-day minimum. So if your business closes on 8 bank holidays (Christmas, Easter, Spring Bank Holiday, etc.), your employees get 20 days of "discretionary" leave on top. That's allowed, and it's common practice — just make sure your contracts are clear about it.

Part-time workers get the same 5.6 weeks, calculated pro rata. Someone working three days a week gets 16.8 days per year, not 28. It sounds fiddly until you realize it's actually fair — they're working 60% of full-time hours, so they get 60% of the leave.

A few things to lock in your employment contracts or staff handbook:

You can force leave timing. Need to shut down for Christmas? You can require employees to take leave during shutdown periods, as long as you give notice equal to twice the length of the leave (two weeks' notice for one week of shutdown).
Carry-over is mostly limited. You can carry over up to 8 days of unused leave to the next year under the Working Time Regulations. Leave that accrues during maternity, paternity, or long-term sick leave must be carried over separately — that's non-negotiable.
Holiday pay isn't just basic salary. If someone regularly earns overtime, commission, or allowances, holiday pay must reflect that. A 2014 court ruling determined that holiday pay based only on basic salary is unlawful if the worker normally earns more. An employee underpaid holiday pay for several years can claim arrears going back up to two years.

Tracking this manually is how errors pile up. Using payroll software that integrates leave tracking with pay runs — and time recording if you need it — removes most of the guesswork.

Statutory Sick Pay (SSP): Three days free, then it's paid

When an employee is off sick for four or more consecutive days (counting weekends and non-working days), they're entitled to Statutory Sick Pay. SSP is currently £109.40 per week and is payable for up to 28 weeks.

But here's the catch: the first three days are waiting days. No SSP during those three days. Only qualifying days (days the employee would normally work) count.

To qualify, the employee must:

Be classified as an employee (not a worker or contractor)
Earn at least the lower earnings limit (£123 per week, 2024/25)
Have notified you within your absence procedure
Have been off for at least four consecutive calendar days

Many employers offer contractual sick pay above the statutory minimum — and that's smart. It builds loyalty and covers the gaps in SSP. But there's no legal requirement to do it. Whatever your policy, get it written down in contracts or your handbook. Surprises about pay during absence breed resentment fast.

For a deeper dive on SSP rules and record-keeping, see our guide to statutory sick pay.

Maternity leave and pay: 52 weeks, with strings attached

All pregnant employees are entitled to up to 52 weeks of maternity leave, regardless of when they started working for you. This splits into:

Ordinary Maternity Leave (OML): First 26 weeks
Additional Maternity Leave (AML): Next 26 weeks

Statutory Maternity Pay (SMP) covers up to 39 weeks:

Weeks 1–6: 90% of average weekly earnings (no cap)
Weeks 7–39: £184.03 per week or 90% of average weekly earnings, whichever is lower

To qualify, she must have worked for you continuously for at least 26 weeks by the 15th week before her due date, and earn at least the lower earnings limit.

Three things every employer should know:

She keeps accruing annual leave and contractual benefits while on maternity leave (except pay). When she returns, she'll have earned an extra 39 weeks' worth of holiday — plan for that.
You cannot dismiss her for pregnancy or maternity leave. Protections run from the moment she tells you she's pregnant until the end of maternity leave. Full stop.
She must give 15 weeks' notice of when she intends to start leave. She doesn't have to give a reason for taking additional maternity leave — she just needs to let you know she's staying away.

If she doesn't qualify for SMP (maybe she hasn't been with you long enough), she may qualify for Maternity Allowance from the government instead.

Paternity, adoption, and shared parental leave: The options

Paternity leave gives eligible employees one or two consecutive weeks off within 56 days of the birth (or adoption). Statutory Paternity Pay is £184.03 per week or 90% of average weekly earnings, whichever is lower. The qualifying criteria are the same as for SMP: 26 weeks continuous employment, lower earnings limit met.

Adoption leave works like maternity leave — 52 weeks of leave, 39 weeks of statutory pay at the same rates as maternity. One parent takes adoption leave; the other can take paternity leave or shared parental leave.

Shared Parental Leave (SPL) is where it gets flexible. Eligible parents can share up to 50 weeks of leave and up to 37 weeks of statutory pay. The mother curtails her maternity leave to create that entitlement. Parents can take SPL in blocks with work in between, or even simultaneously if they want to. The statutory pay rate matches SMP weeks 7–39.

SPL sounds generous on paper. In practice, it hasn't taken off as much as policymakers hoped — partly because the first six weeks of maternity pay at 90% are more attractive, and partly because the admin is fiddly. But if your team uses it, have a clear policy in place. For detailed guidance, see our article on parental leave transitions and the Government's shared parental leave page.

Other leave: Parental leave, dependants, bereavement, jury duty

Parental leave (18 weeks, unpaid) applies to employees with at least one year of service. It's separate from maternity and paternity — a parent can use this in addition to statutory maternity/paternity leave to take extra time off, up to the child's 18th birthday. It must be taken in one-week blocks (single days only if the child is disabled). Maximum four weeks per child per year, unless you agree otherwise.

Time off for dependants is any reasonable, unpaid time off for emergencies: a child falling ill, a carer injured, unexpected disruption to childcare. There's no limit and no qualifying period — the right applies from day one. It's intended for genuine emergencies, not ongoing care needs.

Parental bereavement leave (two weeks, paid) applies since April 2020 to parents who lose a child under 18 or suffer a stillbirth after 24 weeks. The pay rate is £184.03 per week or 90% of average earnings, whichever is lower. There's no statutory bereavement leave for other family members, though many employers offer compassionate leave voluntarily — a good move for morale.

Jury service and public duties: Employees called for jury service are entitled to unpaid time off. They can claim an allowance from the court; you're not required to pay. Employees holding public roles (magistrates, councillors, governors) get reasonable unpaid time off for those duties.

Managing leave without losing your mind

The statutory entitlements listed above are the legal floor. Many employers go further — enhanced maternity pay, additional annual leave, paid sick leave beyond SSP, paid parental leave, paid bereavement leave. Those are your call based on budget and values. But the statutory baseline must always be covered.

In practice, most errors happen because:

Leave tracking is manual and prone to drift (especially carry-over)
Part-time calculations get bungled (how much leave does a 0.6 FTE person actually get?)
Absence overlaps aren't planned for (two team members off simultaneously, who covers?)
Leave interacts with other entitlements in unexpected ways (maternity leave + annual leave accrual + carry-over, all at once)

Payroll software that handles leave tracking, calculates entitlements, and integrates with pay runs removes most of this friction. It's not glamorous, but it's one of the highest-return investments a growing small business can make. You get fewer errors, less time spent on calculations, and both you and your team have confidence the system is fair.

Frequently Asked Questions

Q: Can I refuse annual leave requests? A: You can require when leave is taken (for business reasons), but you can't refuse leave altogether. If an employee hasn't taken their full entitlement by year-end, you must allow them to carry over unused days or pay them out in full when they leave.

Q: What if an employee lies about being sick? A: That's a conduct matter, not a leave matter. You can investigate, and if you discover they've lied, you can take disciplinary action (up to and including dismissal). But during the absence itself, SSP is still payable if the person meets the eligibility criteria.

Q: Do I have to offer more than the statutory minimum? A: No. But many employers do (enhanced maternity/paternity pay, additional annual leave, paid sick leave beyond SSP), because it helps attract and retain staff. Whatever you offer, make sure it's clearly documented and applied consistently.

Q: What happens if an employee takes maternity leave and then resigns? A: That's fine. She's entitled to maternity leave regardless of whether she returns. If she's entitled to SMP, you pay it. If she then resigns during leave, she resigns — no claw-back of maternity pay.

Q: How do I calculate holiday pay for someone with irregular hours? A: Take the average of the 52 weeks before leave starts (or the period of employment, if shorter). Multiply that weekly average by the number of weeks being taken. If someone regularly earns overtime or commission, include that in the average.

Q: Can I count bank holidays as part of the 28-day minimum? A: Yes. You can count bank holidays toward the 28 days, as long as your contracts are clear. Many businesses close on 8 bank holidays (so employees get 20 days of discretionary leave on top).

Q: Do agency workers and contractors get statutory leave? A: No. Statutory leave applies to employees only. Workers (including agency workers) may have some entitlements depending on the contract, but contractors typically have none — that's negotiated individually.

Q: What's the difference between parental leave and shared parental leave? A: Parental leave (18 weeks, unpaid) applies after the statutory maternity/paternity entitlement ends, up to the child's 18th birthday. Shared parental leave is a different scheme where the mother can curtail maternity leave and both parents share the remaining entitlement, with pay. They don't stack — it's either one or the other.

Managing leave is one of those things that feels overwhelming until you systemise it. The rules exist; they're not going to change. The question is whether you spend time learning them once and getting them right, or whether you keep making small mistakes that add up to bigger problems. For most small businesses, the answer is to get your policies in writing, pick payroll software that handles the calculations, and then trust the system.

One more thing: employment law changes. What's correct today (SSP rates, maternity pay thresholds, bank holiday counts) may shift in next year's tax year. Check GOV.UK's statutory pay pages annually. Set a reminder for April each year — it takes 20 minutes and saves you from underpaying your team mid-way through the year.

Try Relentify free for 14 days to see how integrated time recording and payroll management simplifies leave tracking.