🟡 This feature is limited to the UK. It is to be used for part-year or irregular-hours employees.

🔓 Access level in Planday: Administrator, HR manager.

⏱️ Set up time: 10 min. Reading time: 10 min.

ℹ️ Important read: How to create leave accounts.

The new rules apply to holiday years beginning on or after April 1, 2024. If your holiday year started before this date, you may continue using your current accrual method but will need to switch to the new method in the next holiday year.
If you are unsure of what leave employment terms are correct for your business or your employees, we encourage you to visit gov.uk or seek legal advice.

If you're already using an accrual method and you want to transition to the new accrual method, go to How to transition to the UK 2024 accrual method.

What is the UK 2024 Holiday reform?

Part-year and irregular hours workers are entitled to 5.6 weeks of paid annual leave per year, calculated according to their actual hours worked using the 12.07% accrual rate.

For holiday years starting on or after 01 April 2024, the correct method to calculate holiday entitlement for these workers is to calculate holiday in hours rather than weeks. Holiday accrues on the last day of each Pay period, at the rate of 12.07% of the actual hours worked in that Pay period, rounded to the nearest whole number of hours.

Employers have two options for paying out leave:

	Description	Availability in Planday
Option 1: 12.07% accrual	Employees will accrue 12.07% of their working hours at the end of each pay period, rounded to the nearest whole number of hours. Leave is paid out when taken, calculated on the average pay over the last 52 paid weeks.	Supported
Option 2: Rolled-up leave	Employees also accrue 12.07% of their working hours but are paid this amount alongside their regular wages each Pay period. Employees are still entitled to leave but would not be paid when they take leave in an ad hoc manner, as they are already being paid out continuously.	This method isn't fully supported in Planday. We advise configuring the payout in your payroll system for accurate calculations based on the total payment in each Pay period.

Create a leave policy with the new accrual method

Where to create this leave policy

⬆️ You can create a policy with the new accrual method under Settings > Leave & Overtime > Policies > Create policy.

Alternatively, go to Schedule > Leave accounts (or Absence accounts) > Manage leave > Manage policies > Create policy.

Annual leave hourly 12.07% policy

Select the predefined leave policy Annual leave (hourly - 12,07%).
Select the Accruing period.
Choose the shift types that are used to calculate the accrued balance and leave pay. Typically, they should include “Normal”, “Overtime”, “Training/Induction”.
These shift types must be approved for the working hours to be included in the calculation.
Click Save when you’re ready.

Do not select annual leave or statutory leave shift types such as sick leave, maternity leave, paternity leave, etc.

Annual leave hourly rolled-up policy

Select the predefined leave policy Annual leave (hourly rolled-up).
Then, follow the steps described above for the 12.07% policy.

Both options - 12.07% accrual or rolled-up leave accrue hours in the same way.

However, for the rolled-up leave policy, the monetary payout option is not selected as we advise configuring the payout in your payroll system.

Adjust the policy created

You then have the option to edit the policy you’ve just created and enable negative balance or carry-over for example. Click on the pen icon in the policy overview to edit the policy.

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You can:

Edit the Standard rules (Opening balance, Accruing rate and Monetary payout).
Add Optional rules (automatic creation of accounts, carry over, negative balance, etc.).

Enable additional settings

To ensure accurate accrual calculation for statutory leave (sick leave and family related leave), there are two things you need to do under Settings > Leave & Overtime > Accrual calculation setup.

1. Define a start date for your organisation’s recurring Pay periods.

Note: A Pay period is how often an employee gets paid (monthly, fortnightly, weekly, or four-weekly).

First, ensure your employees are assigned the correct Pay period in their Employment tab.

To check this:

Go to People > Employees.
Edit the relevant employees.
Switch to the Employment tab > Pay period.
Edit the Pay period if needed.

By default, when an employee is created, their Pay period is “monthly”.

Then, go to Settings > Leave & Overtime > Accrual calculation setup and set a start date for each of the Pay periods that you use.

2. Select the statutory leave (family-related leave and time off sick) shift types that should count towards the accrual of hours.

For example, this can be “Sick” or “Maternity leave”.

These shift types must be approved for the statutory leave hours to be included in the calculation.

Note: If some shift types are greyed out, it’s because the option to swap them is enabled. To disable the swap option in a shift type, go to Settings > Schedule > Shift types. Edit the relevant shift type and untick “Allow booking”.

Once you’ve created the new policy, create leave accounts for your employees.