29/12/2025
🎯 What Should You Do With Employees’ Unused Holiday at Year-End?
For some, the leave year is drawing to a close, and you might find that you have staff with unused holidays. Before you close the books, here are some smart steps to protect your business and stay fair to your employees:
✅ Encourage leave sensibly: Remind your team early about remaining holiday time and offer guidance. This helps ensure staff get their rest and reduces end-of-year holiday build-ups.
📄 Carry over or restrict carry over? Know your rules:
● In many cases, unused statutory leave cannot just be “paid out.” Instead, un-used holiday often must either be taken or carried over, depending on contract and circumstances.
● Some employers adopt a ‘use it or loose it’ policy, this must be specifically specified in the terms and conditions.
● If workers couldn’t take holiday because of long-term sickness, family leave such as maternity leave or employer constraints, carry-over may be allowed, often within a set timeframe (e.g. the next 18 months) rather than automatically lost.
📅 Plan early - not at the last minute: Waiting until the final month to sort outstanding holiday can create operational chaos. A timely plan for holiday requests, carry-overs or leave-taking makes for smoother payroll, happier team and better compliance.
⚠️ Know the ‘payment in lieu’ rules: Paying employees for unused holiday at year-end isn’t always lawful. That option normally only applies when someone leaves the job, not simply because the holiday year ended.
Need help reviewing your holiday policy or figuring out what’s best for your team? Consult HR can guide you through compliance, carry-over agreements and leave-planning so you finish the year in control.
📩 Get in touch today! Call: 078 5808 9006 or email: [email protected]