Why Carry-Over Rules Trip Up So Many UK Employers
TimeClock 365 sees this question from UK HR teams constantly at year-end: an employee has unused holiday - can it roll into the new leave year, or is it forfeited? The honest answer is "it depends," because UK statutory annual leave is not one single pot. It's made up of two legally distinct entitlements with different carry-over rules, plus separate carry-over rights that apply during sickness and family leave. Getting the wrong answer isn't just a bookkeeping error - it can mean unlawfully withholding leave a worker is entitled to, or overpaying for leave that should have lapsed.
The Two Parts of the 5.6-Week Entitlement
Every full-time UK worker is entitled to a statutory minimum of 5.6 weeks of paid annual leave per year (28 days for a standard 5-day week). Under the Working Time Regulations 1998, this splits into:
- Regulation 13 leave - 4 weeks: the original entitlement derived from the EU Working Time Directive.
- Regulation 13A leave - 1.6 weeks: additional leave added by the UK government on top of the EU minimum.
This split matters because carry-over rights are different for each part, and many employers only realise this when a dispute arises.
Default Rule: Ordinary Unused Leave Does Not Carry Over
In the normal course of a leave year, if a worker simply doesn't take all of their holiday - no illness, no family leave, just poor planning or a busy period - there is no automatic statutory right to carry any of it into the next leave year. This is the "use it or lose it" default. However, an employer can choose to allow carry-over of the 1.6-week additional entitlement (Regulation 13A) by agreement - for example, in a contract or staff handbook - typically capped at one year. This is a matter of employer policy, not statutory obligation, so the rules should be written down clearly rather than left to informal practice.
Carry-Over When a Worker Is on Long-Term Sick Leave
The rules change when a worker cannot take leave because they are off sick. Case law (including NHS Leeds v Larner and the underlying Pereda and Stringer line of ECJ/CJEU rulings) established that workers on long-term sick leave continue to accrue statutory annual leave, and if illness prevents them from taking it, they can carry over up to 4 weeks (the Regulation 13 portion) into the following leave year or years. This carried-over sick leave must generally be used within 18 months of the end of the leave year in which it accrued, after which it lapses. The 1.6-week additional entitlement is not automatically covered by this rule unless the employer's own policy extends it.
Carry-Over During Maternity, Paternity, and Other Family Leave
A worker on maternity, shared parental, adoption, or paternity leave keeps accruing their full statutory annual leave entitlement throughout that leave, exactly as if they were working. Because it is not physically possible to take annual leave and family leave at the same time, any annual leave that accrues but goes untaken during that period must be carried over - there is no forfeiture. This is one of the more commonly missed points in payroll and leave systems that don't specifically flag family leave as a carry-over trigger.
What About Furlough-Era and Emergency Carry-Over Rules?
During the COVID-19 pandemic, temporary regulations allowed up to 4 weeks of leave to be carried over for up to two years where it wasn't reasonably practicable to take it due to the pandemic's effects on the business. Those emergency provisions were time-limited and have since expired - they no longer apply to current leave planning, and any remaining carried-over leave from that period should already have been used or have lapsed. Employers should not assume a two-year carry-over window still exists for any reason today.
Practical Steps for Getting Carry-Over Right
- Track the Regulation 13 (4-week) and Regulation 13A (1.6-week) portions of entitlement separately, since their carry-over rules differ.
- Flag sickness absence and family leave periods automatically so accrued-but-untaken leave is carried over rather than lost at year-end.
- Set a clear, written policy on whether the additional 1.6 weeks may be carried over by agreement, and for how long.
- Apply the 18-month use-by rule to sickness-related carried-over leave so it doesn't accumulate indefinitely.
- Keep a record of why any leave was carried over - sickness, family leave, or agreed policy - since this is now expected as part of adequate holiday record-keeping.
How TimeClock 365 Helps
TimeClock 365's leave management module tracks the statutory and additional portions of annual leave separately, automatically flags leave accrued during sickness or family leave for carry-over, and applies use-by deadlines so nothing is lost or over-carried by mistake. Paired with our HR compliance reporting, you get an audit-ready record of exactly how much leave carried over, why, and by when it needs to be used.
Frequently Asked Questions
Can employees carry over unused annual leave in the UK?
Not automatically, if the leave simply went unused during normal working. The statutory default is "use it or lose it" for ordinary leave, though employers can choose to allow carry-over of the additional 1.6-week entitlement by agreement.
How much leave can a worker on long-term sick leave carry over?
Up to 4 weeks (the Regulation 13 portion of statutory leave), and it must generally be used within 18 months of the end of the leave year in which it accrued.
Does annual leave still accrue during maternity or paternity leave?
Yes. Workers continue to accrue their full statutory annual leave entitlement throughout maternity, paternity, adoption, or shared parental leave, and any leave that can't be taken during that period must be carried over.
Is there still a two-year carry-over rule from the COVID-19 pandemic?
No. That was a temporary emergency measure that has since expired and no longer applies. Current carry-over should follow the standard sickness, family leave, and agreed-policy rules.
What's the difference between the 4-week and 1.6-week parts of UK holiday entitlement?
The 4-week portion comes from the EU-derived Working Time Regulations and has specific statutory carry-over protection during sickness. The 1.6-week portion is a UK-only addition, and its carry-over depends on employer policy rather than an automatic statutory right.
Do employers have to let staff carry over holiday if they were just too busy to take it?
Not by law, unless the employer's own policy allows it. There is no statutory carry-over right for leave that went unused purely due to workload or poor planning, as opposed to sickness or family leave.
This article is for general information and does not constitute legal advice. For guidance specific to your business, consult ACAS or a qualified employment law solicitor.