UK employers must allow carry-forward in four situations: long-term sickness (up to 4 weeks, used within 18 months), statutory family leave (full 5.6 weeks), employer failure to enable leave-taking, and for irregular hours workers in those same circumstances. Outside these, carry-forward is at your discretion. You need a written policy to set the voluntary limit, the expiry date, and how to apply, and from 6 April 2026 you must keep records of any leave carried.
Why you need a written carry-forward policy
Carry-forward rules sit at the awkward intersection of statutory rights, contractual terms and employment tribunal risk. Without a written policy, three things tend to go wrong:
- Statutory carry-forward gets ignored. If an employee is off sick for six months, the law entitles them to carry up to 20 days into the next leave year. A manager who says "sorry, we don't carry leave" is wrong in law, and the employee can claim unlawful deduction from wages if the leave is not honoured on termination.
- Voluntary carry-forward grows without a cap. Informal agreements pile up. One employee carries five days, another carries 12, a third carries none because they didn't ask. When any of them leaves, the correct payout is disputed because there is no written rule.
- Employers inadvertently create unlimited carry-forward. By failing to warn employees that unused leave will be lost at year-end, employers trigger the "employer failure" carry-over right, which has no statutory cap on accumulation and no fixed expiry date.
A clear written policy removes those risks. It also gives managers a consistent answer when an employee asks whether they can carry five days to January.
If you do not yet have a broader leave policy, start with the company leave policy guide. The carry-forward clauses below slot into that structure, or stand alone as a supplementary document.
When carry-forward is mandatory
Since 1 January 2024, the Working Time Regulations 1998 (as amended) set out four scenarios in which employers must allow carry-forward. These rights cannot be overridden by a policy or a contract clause. See our detailed annual leave carry-forward rules guide for the full statutory analysis; the essentials are below.
Outside these four scenarios, employers are entirely free to operate a strict use-it-or-lose-it policy. There is no general right to carry forward unused annual leave.
If you do not actively warn employees that leave will be lost at year-end, you trigger an unlimited carry-over right. That warning needs to happen every year, to every employee, before the leave year ends. A policy alone is not enough: ACAS guidance makes clear that employers must actively encourage leave-taking throughout the year, not just remind at the deadline.
Book Time Off shows every employee their remaining leave balance at a glance. Managers can see at any point who still has days to take, making it straightforward to encourage leave-taking before year-end and satisfy the "reasonable opportunity" duty. Try it free for 30 days.
Making your policy decisions
Before writing your clauses, you need to make three choices. This table shows the common options and what suits each type of business.
| Decision | Options | When it suits |
|---|---|---|
| Voluntary carry-forward: yes or no? | Strict use-it-or-lose-it (no voluntary carry) or allow up to a set number of days. | Use-it-or-lose-it suits teams where leave peaks are predictable and capacity is tight. Voluntary carry suits businesses with project-driven work or seasonal peaks near year-end. |
| How many days? | Common limits: 5 days, 10 days, the full Regulation 13A allowance (8 days for a five-day-week worker), or unlimited for leave above the statutory minimum. | Five days is the most common compromise. It reduces the year-end booking rush without building up a significant future liability. |
| Expiry deadline? | Q1 deadline (e.g. by 31 March), specific date (e.g. 1 April), or first three months of new leave year. Must be a firm date in writing. | Q1 deadline prevents carry-forward piling into the middle of the next leave year and repeating the problem. |
You can agree to carry forward the 1.6-week Regulation 13A entitlement (for one leave year only) and any contractual leave above the statutory minimum. You cannot agree to carry forward the 4-week Regulation 13 pot on a voluntary basis: that pot only carries in the four mandatory scenarios above. Many employers do not distinguish between the two pots in practice, which is usually fine: the problem only arises if a worker leaves and you try to cap a carried Regulation 13 entitlement to which they had a statutory right.
Sample policy approach: the five-day Q1 cap
The most widely used voluntary carry-forward arrangement in UK SMEs is a cap of five days, approved by the manager before year-end, with a Q1 expiry (usually 31 March or three months from the leave year end). The policy clause below uses this as the default. The drafting notes in each clause tell you where to adjust it to match your chosen approach.
Copy-and-paste policy template
The wording below covers all 12 clauses of a complete carry-forward policy. Adapt the placeholders, choose between the drafting note options, then remove the notes before issuing the policy. Prefer to edit it in Word? Download the same policy as a formatted editable document below.
Carry-forward leave policy template (UK)
The full 12-clause policy as an editable Word document. Drop your details into the bracketed fields, read the drafting notes, then delete them before issuing.
- 12 clauses covering mandatory and voluntary carry-forward
- Blue placeholders show where to add your details
- Drafting notes explain the choices only you can make
- Statutory and discretionary rights clearly separated
- Document control panel and disclaimer included
1. Purpose and scope
This policy sets out [Company Name]'s rules for carrying forward unused annual leave from one leave year to the next. It applies to all employees. Workers on irregular hours or part-year contracts are covered by clause 6. Contractors are not covered unless their contract says otherwise.
2. The leave year and entitlement
The Company's leave year runs from [start date] to [end date]. Each employee's statutory entitlement is 5.6 weeks per year, made up of four weeks under Regulation 13 of the Working Time Regulations 1998 and 1.6 weeks under Regulation 13A. The Company's full contractual entitlement is [X] days per year for a full-time employee.
3. Mandatory carry-forward: long-term sickness absence
Where an employee has been unable to take up to four weeks (20 days for a five-day-week employee) of their Regulation 13 statutory leave because of long-term sickness, that leave will be carried forward to the following leave year. The carried leave must be taken within 18 months from the end of the leave year in which it accrued. Any carried leave not taken by that deadline will expire, but must be paid out if the employee leaves before the deadline.
4. Mandatory carry-forward: statutory family leave
Where an employee has been unable to take some or all of their statutory leave because they were on maternity leave, paternity leave, adoption leave, shared parental leave, ordinary parental leave, or parental bereavement leave, their full 5.6 weeks of statutory leave entitlement will be carried forward to the following leave year. There is no fixed statutory use-by date for this carried leave; the Company expects employees to use it in the leave year immediately following their return wherever practicable.
5. Mandatory carry-forward: employer failure to enable leave-taking
If the Company fails to recognise an employee's right to paid annual leave, fails to give the employee a reasonable opportunity to take leave and to encourage them to do so, or fails to warn the employee (before the year ends) that leave not taken will be lost, the employee is entitled to carry forward up to four weeks of their Regulation 13 leave for as long as the failure continues. The Company will take all reasonable steps to avoid this situation by maintaining a system of leave tracking, giving managers the information they need to manage leave-taking, and issuing a year-end reminder to all staff before the leave year closes.
6. Mandatory carry-forward: irregular hours and part-year workers
Employees on irregular hours or part-year contracts, whose entitlement accrues under Regulation 15B of the Working Time Regulations 1998, are entitled to carry forward their full 5.6 weeks of statutory entitlement in the same circumstances described in clauses 3, 4 and 5. The 18-month use-by window in clause 3 also applies to sickness carry-over for these workers.
7. Discretionary carry-forward
Outside the mandatory circumstances in clauses 3 to 6, annual leave does not carry forward automatically. With prior written approval from their line manager, an employee may carry forward up to [5 days] of their Regulation 13A entitlement or contractual leave above the statutory minimum. Approval is at the manager's discretion and may be declined if the business needs require the employee to take leave within the leave year.
8. Applying for discretionary carry-forward
Requests to carry forward leave under clause 7 must be submitted no later than [e.g. 1 December, or two weeks before the leave year end] and approved in writing before the leave year closes. Requests submitted after that date will not be considered. Approval must be recorded in the Company's leave system.
9. Expiry of discretionary carry-forward leave
Leave carried forward under clause 7 must be used by [e.g. 31 March in the following leave year, or within three months of the leave year end]. Leave not used by that date will expire and will not be paid out, unless the employee is leaving employment (see clause 10).
10. Carry-forward on leaving employment
When employment ends, the Company will calculate each employee's leave entitlement for the final leave year on a pro-rata basis, including any leave validly carried forward from the previous year under clauses 3, 4, 5 or 6. Leave taken in excess of the pro-rata accrued entitlement will be recovered from the final pay. Leave accrued but not taken, including valid carried-forward leave that has not yet expired, will be paid out at the employee's normal daily rate. Leave that has expired under the deadline in clause 9 before the termination date does not need to be paid out.
11. Record-keeping
In line with the statutory record-keeping duty in force from 6 April 2026, the Company will maintain a record for each employee showing: (a) their statutory and contractual leave entitlement for the leave year; (b) leave taken during the year; (c) any leave carried forward, the basis for the carry (mandatory or discretionary), and any applicable expiry date; and (d) the balance at the end of each leave year. Records will be kept for at least six years and will be made available to the employee on request.
12. Policy review
This policy will be reviewed at least once a year and updated whenever relevant legislation changes. The current version is dated [date]. Previous versions are held by HR. Questions about the policy should be directed to [HR contact / line manager].
Manager checklist
At year-end (before the leave year closes)
During the new leave year
Book Time Off shows carried-forward days as a labelled balance with the use-by date, distinct from the current year's entitlement. When the expiry date arrives the carried balance drops automatically. Every approval is logged, so the manager checklist above becomes a five-minute review rather than a spreadsheet exercise. Start your free 30-day trial.
Record-keeping from April 2026
From 6 April 2026, employers must keep adequate records of annual leave taken and holiday pay paid for each worker, for at least six years. The duty applies regardless of employer size.
For carry-forward, this means your records should show:
- The amount of leave carried forward and from which leave year.
- The basis for the carry (sickness, statutory family leave, employer failure, or voluntary).
- The applicable use-by date (especially the 18-month sickness deadline).
- When the carried leave was eventually taken or paid out.
Leave records containing information about sickness reasons are likely to include special-category health data under UK GDPR. You need a lawful basis for processing that data, appropriate retention rules, and access controls. Any reasonable format is acceptable: spreadsheets, payroll systems, or dedicated leave software all qualify provided the required information is captured and kept securely.
If carry-forward has been managed informally until now, the April 2026 duty is a practical prompt to formalise it. The policy clauses above, combined with a leave system that records carry-forward and expiry dates, satisfy the requirement without needing a new process.
Book Time Off keeps a complete audit trail: who approved what, when, and what was carried and when it expired. The statutory record-keeping requirement from April 2026 is satisfied without building a separate spreadsheet. Try it free for 30 days, no card required.
Related guidance
Sources
Primary sources
| GOV.UK | Holiday entitlement: carrying over holiday · Overview of carry-over rights and employer responsibilities. Checked June 2026. |
| Legislation.gov.uk | Working Time Regulations 1998 · Regulation 13 (4-week entitlement), Regulation 13A (1.6-week entitlement), Regulation 15B (irregular hours workers). Checked June 2026. |
| Legislation.gov.uk | Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 · The January 2024 amendments codifying carry-over scenarios and introducing Regulation 15B. Checked June 2026. |
| GOV.UK | Holiday pay and entitlement reforms from 1 January 2024 · Government guidance on the 2023 amendments including carry-over codification. Checked June 2026. |
| ACAS | Carrying over holiday · Practical guidance on when carry-over is allowed and employer responsibilities. Checked June 2026. |