Carrying Over Annual Leave in the UK: Rules, Rights, and Best Practices

Annual leave carry-over in the UK is one of those topics that sounds simple until you actually try to apply the rules. Most employers — and many HR professionals — get it wrong because the regulations split the 5.6-week entitlement into two distinct portions with different carry-over rules, and various circumstances (sickness, maternity, the COVID-era regulations) add further layers of complexity.

This guide explains the rules as they stand today, covers every scenario you are likely to encounter, and gives you practical policy wording you can adapt for your organisation.

The Default Position: How Carry-Over Actually Works

The 5.6 weeks of statutory annual leave in the UK is not a single block. It is composed of two parts, each governed by different regulations:

The First 4 Weeks (Regulation 13 Leave)

These 4 weeks (20 days for a full-time worker) derive from the EU Working Time Directive, implemented in the UK through Regulation 13 of the Working Time Regulations 1998.

Default carry-over rule: This leave cannot normally be carried over to the next leave year. It must be taken in the year it is accrued.

However — and this is the critical point many employers miss — there are specific circumstances where Regulation 13 leave must be carried over. We cover these below.

The Additional 1.6 Weeks (Regulation 13A Leave)

The extra 1.6 weeks (8 days for a full-time worker) is a purely domestic UK entitlement, added by Regulation 13A. This is the portion that often includes bank holidays.

Default carry-over rule: This leave cannot be carried over unless the employment contract or a workplace agreement specifically permits it.

The Counterintuitive Reality

Here is what confuses people: the 4-week EU-derived leave is actually the portion that must be carried over in certain circumstances (sickness, maternity), while the 1.6-week domestic leave can only be carried over if the contract says so.

This means the commonly stated rule — “employees can’t carry over their leave” — is both right and wrong depending on which portion you are talking about and why the leave was not taken.

What About Contractual Leave Above 5.6 Weeks?

If you offer more than the statutory 5.6 weeks (e.g., 25 days plus bank holidays = 33 days), the additional days above 28 are entirely governed by the employment contract. You set the carry-over rules for these days — whether they can be carried over, how many, and when they expire.

Contractual vs Statutory Carry-Over

Understanding the distinction between statutory and contractual carry-over is essential for writing a clear policy.

Statutory Carry-Over (What the Law Requires)

The law requires carry-over of Regulation 13 leave (the first 4 weeks) only in specific circumstances:

• The employee was on sick leave and unable to take annual leave
• The employee was on maternity, paternity, adoption, or shared parental leave
• The employer failed to facilitate the employee taking their leave (following the Max-Planck-Gesellschaft CJEU ruling and the Smith v Pimlico Plumbers case)

In these situations, the employer cannot refuse carry-over regardless of what the contract says.

Contractual Carry-Over (What You Choose to Offer)

Many employers allow employees to carry over a set number of days (commonly 3–5 days) as a benefit. This is entirely at the employer’s discretion and should be clearly stated in the leave policy or employment contract.

Key principle: You can always be more generous than the statute but never less. If the law requires carry-over in a specific situation, a contractual clause saying “no carry-over” is overridden by the statute.

COVID-Era Extended Carry-Over Rules and Their Legacy

What the Regulations Said

The Working Time (Coronavirus) (Amendment) Regulations 2020 introduced a temporary right for workers to carry over up to 4 weeks of Regulation 13 leave into the following two leave years if they were unable to take it due to the effects of COVID-19.

This applied where the worker could not reasonably take some or all of their leave in the relevant year because of the pandemic — for example, because they were a key worker with no ability to take time off, or because the employer cancelled leave due to operational pressures.

The Legacy (As of 2026)

The emergency carry-over regulations applied to leave years ending in 2020, 2021, and 2022. The carried-over leave had to be used within two years. This means:

• Leave from the 2020/21 leave year had to be used by the end of 2022/23
• Leave from the 2021/22 leave year had to be used by the end of 2023/24
• Leave from the 2022/23 leave year had to be used by the end of 2024/25

By 2026, these COVID-era carry-over entitlements should be fully exhausted. However, if your organisation did not properly track COVID carry-over and employees have outstanding claims, this could still surface. The practical lesson: keep records of carry-over decisions, even temporary ones.

The Broader Precedent

The COVID regulations reinforced an important principle: when circumstances genuinely prevent an employee from taking leave, the law protects their right to carry it over. This principle existed before COVID (for sickness and maternity) and continues after it.

Carry-Over When Employees Are Off Sick

The Rule

If an employee is unable to take annual leave because they are on sick leave, they are entitled to carry over their Regulation 13 leave (the first 4 weeks) to the next leave year. This was established by the Court of Justice of the European Union in Stringer v HMRC (2009) and confirmed in subsequent UK case law.

Key Details

• The carry-over right applies to the 4 weeks of Regulation 13 leave, not the additional 1.6 weeks of Regulation 13A leave
• Carried-over leave must be taken within 18 months of the end of the leave year in which it was accrued (following the CJEU ruling in Max-Planck-Gesellschaft zur Förderung der Wissenschaften)
• The employee can choose to take annual leave during a period of sick leave (and receive holiday pay instead of sick pay, which is usually higher)
• The employer cannot force an employee to take annual leave during sick leave without agreement

Practical Example

An employee’s leave year runs January to December. They go on long-term sick leave in August 2026 with 12 days of annual leave remaining. They remain off sick until March 2027.

• They can carry over their untaken Regulation 13 leave (up to 20 days’ worth) into 2027
• This carried-over leave must be used by 30 June 2028 (18 months after the end of the 2026 leave year)
• The Regulation 13A portion (the additional 1.6 weeks) does not carry over unless the contract allows it

Interaction with Long-Term Sickness

For employees on long-term sick leave spanning multiple leave years, each year’s Regulation 13 entitlement carries forward with its own 18-month expiry window. This can result in a significant accumulated leave balance. Your policy should address how this is managed when the employee returns to work.

Maternity, Paternity, and Parental Leave Impact on Carry-Over

Maternity Leave

Annual leave continues to accrue throughout the entire 52 weeks of maternity leave (both ordinary and additional). This means:

• An employee on maternity leave accrues their full annual leave entitlement
• If the maternity leave spans the end of a leave year, untaken leave that could not be taken due to maternity must be carried over
• Many employers allow employees to attach untaken annual leave to the beginning or end of maternity leave

Example: An employee starts maternity leave in September with 15 days of annual leave remaining. The leave year ends in December. She cannot take those 15 days during maternity leave (unless she chooses to). She is entitled to carry them over into the next leave year.

Paternity Leave

The same principle applies: annual leave accrues during paternity leave, and any leave that could not be taken as a result should be carried over.

Shared Parental Leave

Annual leave accrues during shared parental leave. Carry-over rules apply as with maternity leave.

Adoption Leave

Treated identically to maternity leave for accrual and carry-over purposes.

Practical Tip

Communicate with employees before they start maternity or parental leave about their leave balance and options. Encourage them to take accrued leave before starting maternity leave if possible, or to plan when they will take it after returning. This avoids a large accumulated balance that creates operational problems when they return.

The Employer’s Duty to Facilitate Leave-Taking

A relatively recent but important development: the employer has a duty to actively enable workers to take their leave. This comes from the CJEU ruling in Max-Planck-Gesellschaft zur Förderung der Wissenschaften v Shimizu (2018) and has been applied in UK case law.

What This Means

If an employee does not take all their annual leave, the employer can only refuse carry-over if:

1. The employer actively encouraged the employee to take their leave
2. The employer warned the employee that untaken leave would be lost
3. The employee genuinely had the opportunity to take the leave but chose not to

If the employer did none of these things — if, for example, an employee’s workload made it practically impossible to take leave, or the employer discouraged leave-taking through culture or policy — the employee retains the right to carry over the leave.

Practical Implications

• Send employees periodic reminders of their remaining leave balance (quarterly is good practice)
• Actively encourage leave-taking, especially in the second half of the leave year
• Document that you have done so
• Do not create a culture where taking leave is frowned upon or where requests are routinely refused

Best Practices for Managing Year-End Leave Rushes

The predictable consequence of carry-over rules is the year-end rush: too many employees trying to use up their remaining leave in the final weeks of the leave year. Here is how to manage it:

1. Communicate Early and Often

Send leave balance reminders at least quarterly. At the start of Q3 (or 6 months before your leave year ends), send a targeted message to employees with significant unused balances.

2. Set a Booking Deadline

Require employees to book their remaining leave by a specific date (e.g., at least 4–6 weeks before the leave year ends). This gives you visibility and time to manage coverage.

3. Spread the Load

Encourage employees to plan leave evenly throughout the year. Some organisations require at least one week of leave to be taken in each quarter.

4. Allow Limited Carry-Over as a Safety Valve

A contractual carry-over allowance of 3–5 days gives employees flexibility without creating a large accumulated liability. Set a clear expiry date for carried-over days (e.g., must be used within the first quarter of the new leave year).

5. Monitor Balances Proactively

Do not wait for December to discover that half your team has 10+ days unused. Monthly or quarterly balance reports allow you to intervene early.

6. Address the Root Cause

If large numbers of employees consistently fail to use their leave, the problem is not their time management — it is your workload management, staffing levels, or culture. Investigate and address the underlying issue.

Practical Policy Wording

Here is sample policy wording you can adapt. This is guidance, not legal advice — have your specific policy reviewed by an employment lawyer.

Carry-Over Clause (Example)

Carry-Over of Annual Leave

Employees are expected to take their full annual leave entitlement within the leave year (1 January to 31 December).

Employees may carry over up to 5 days of unused annual leave into the following leave year. Carried-over days must be used by 31 March of the new leave year, after which they will be forfeited.

In exceptional circumstances (such as extended absence due to sickness, maternity leave, paternity leave, adoption leave, shared parental leave, or parental bereavement leave), additional carry-over will be permitted in accordance with statutory requirements.

The Company will make reasonable efforts to remind employees of their unused leave balance and encourage them to take their full entitlement. Employees who believe they have been unable to take leave due to work demands should raise this with their manager or HR at the earliest opportunity.

Sickness Carry-Over Clause (Example)

Carry-Over Due to Sickness Absence

Where an employee has been unable to take annual leave due to sickness absence, untaken statutory annual leave (up to 4 weeks / 20 days for a full-time employee, pro-rata for part-time employees) will be carried over to the following leave year. This carried-over leave must be used within 18 months of the end of the leave year in which it was accrued.

Any additional contractual leave above the statutory entitlement will be subject to the standard carry-over provisions set out above.

Maternity/Parental Leave Carry-Over Clause (Example)

Carry-Over Due to Family-Related Leave

Annual leave continues to accrue during maternity leave, paternity leave, adoption leave, and shared parental leave. Where an employee has been unable to take accrued annual leave due to family-related leave, the untaken leave will be carried over to the following leave year.

Employees are encouraged to discuss their leave balance with their manager or HR before commencing family-related leave to agree arrangements for taking accrued leave, which may include adding leave days before or after the family-related leave period.

How Leave Balance Handles Carry-Over Automatically

Managing carry-over manually means tracking multiple deadlines per employee, distinguishing between statutory and contractual portions, monitoring expiry dates, and sending reminders — all while keeping accurate records for compliance.

Leave Balance automates this entirely:

• Configurable carry-over rules — set the number of days that can be carried over, the expiry date, and any exceptions
• Automatic balance calculations — the system tracks accrued, taken, carried-over, and remaining leave in real time
• Reminders and notifications — employees and managers receive alerts about upcoming expiry dates and unused balances, delivered through Slack or Microsoft Teams
• Statutory compliance — the system accounts for sickness and maternity carry-over rights, so you do not accidentally forfeit leave that should be preserved
• Audit trail — every carry-over decision is logged, giving you a defensible record

All of this for $10/month flat (or $100/year), with unlimited employees and policies. Start your 14-day free trial — no credit card required — and let the system handle the carry-over complexity while you focus on running your business.