A Christmas shutdown funded from annual leave usually adds no extra payroll cost, because salaried staff are paid as normal and the closed days come from leave they were entitled to anyway. The real impact is the days taken off each person's allowance. Extra paid time off, by contrast, is a genuine added cost.
How this Christmas shutdown calculator works
A Christmas shutdown is when a business closes for a set period, typically between Christmas and New Year, and everyone is off at the same time. This calculator helps you plan it by showing the payroll value of the closed days and how many days come off each person's leave allowance.
The starting point is a daily rate. The calculator divides the average annual salary by 260 working days, which is five days a week across 52 weeks. That daily rate is then multiplied by the number of working days you close and the number of staff affected.
What that figure means depends on how you fund the shutdown. If the days come from each person's annual leave, salaried staff are paid the same whether they work or take leave, so there is no extra cost: the figure is simply the value of the leave used. If you give the time as extra paid leave, that value becomes a real added cost. If the days are unpaid, it is roughly what you save in wages, though unpaid shutdowns need a contractual right or agreement.
Worked examples
Common situations
Most shutdown questions come down to two things: can you require it, and who pays. The legal position is clearer than many employers expect.
What if someone has run out of leave?
By late December some staff have little or no allowance left, especially anyone who started partway through the year. You have a few fair options: let them borrow a day or two from next year's allowance, agree unpaid time off for the shortfall, or simply pay the days. The one rule that matters is consistency: pick an approach and apply it across the team, rather than case by case.
What this calculator does not do
This calculator is a planning estimate, not a payroll engine. It uses a flat 260-day divisor for the daily rate and does not handle part-time or variable hours per person, pro-rata allowances, tax and National Insurance, or pension costs. It assumes a single average salary across the team rather than each person's actual pay.
FAQs
Can an employer force a Christmas shutdown?
Yes. Employers can require staff to take annual leave on set days, including a Christmas shutdown, as long as they give enough notice. Under the Working Time Regulations 1998, the notice must be at least twice the length of the leave, so for a three-day shutdown that is at least six days' notice. Many employers set the rule out in the contract or staff handbook.
How much does a Christmas shutdown cost a business?
If the closed days come from each employee's annual leave, there is usually no extra payroll cost, because salaried staff are paid as normal and the days come from leave they were entitled to anyway. The payroll value of the closed days is the daily rate multiplied by the number of days and the number of staff. Extra paid time off adds that amount as a real cost, while an unpaid shutdown reduces wage cost but needs a contractual right or agreement.
How is the daily rate worked out?
This calculator divides the annual salary by 260 working days, which is five days a week across 52 weeks. So a £30,000 salary gives a daily rate of about £115. It is a simple estimate for planning. Payroll may use a slightly different figure depending on how your contracts define a working day.
Do bank holidays count in a Christmas shutdown?
No. Christmas Day, Boxing Day and New Year's Day are bank holidays, so they are not normal working days and are not deducted from anyone's allowance in this calculator. Only the working days you choose to close, usually 27 to 31 December, count towards the cost and the days deducted.
Can you make staff take unpaid leave over Christmas?
Only if there is a contractual right to it or the staff agree. You cannot usually impose unpaid time off without one of those. Most employers fund a shutdown from annual leave instead, which is paid. If someone does not have enough leave left, options include allowing leave to be taken from next year, agreeing unpaid time, or paying the days.
What if an employee does not have enough holiday left for the shutdown?
This is common late in the leave year. You can agree to let them take some leave from next year's allowance, agree unpaid time off for the shortfall, or pay the days as normal. Whatever you choose, set it out clearly and apply it consistently across the team.
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Sources
| Source | What it covers |
|---|---|
| GOV.UK · Booking and taking holiday | An employer can tell staff when to take leave, with the required notice period. |
| ACAS · Holiday entitlement | The 5.6 weeks statutory minimum and how annual leave works in the UK. |
| Working Time Regulations 1998, reg 15 | The notice rule for requiring or refusing leave on particular days. |
| GOV.UK · UK bank holidays | Confirms Christmas Day, Boxing Day and New Year's Day as bank holidays. |