Employment Rights Act 2025 – Changes to Annual Leave (April 2026) introduces a new record-keeping duty that every UK employer should treat as a compliance priority. From 6 April 2026, employers must keep annual leave and holiday pay records for at least 6 years.
The rule does not increase statutory holiday entitlement, which remains 5.6 weeks for most workers. It changes the evidence you need to hold.
Could your HR and payroll records prove how a worker’s holiday pay was calculated 3 years from now? This guide explains what changed, what counts as adequate records, and how to prepare your leave process before a worker query or enforcement request exposes gaps.
Employment Rights Act 2025 annual leave changes: the short answer
- The April 2026 annual leave change is about records, not extra holiday.
- From 6 April 2026, employers must keep adequate records of annual leave and holiday pay for at least 6 years from the date those records are made.
- Official Acas guidance states that employers must record: holiday taken, holiday carried over from previous years, holiday pay, any payments in lieu of holiday.
- For holiday pay, employers must also show what was included in the payment, such as bonuses or commission.
Data points employers should know
- 6 April 2026 – the date the holiday record-keeping duty started.
- 6 years – the minimum retention period for annual leave and holiday pay records.
- 5.6 weeks – statutory paid holiday entitlement for most UK workers.
- 28 days – statutory paid annual leave for a worker on a 5-day week.
- 7 April 2026 – the date the Fair Work Agency was established.
Did the Employment Rights Act 2025 change annual leave entitlement?
No. The Employment Rights Act 2025 did not raise the amount of statutory annual leave.
Most workers are still entitled to 5.6 weeks of paid holiday a year. For someone working 5 days a week, that usually equals 28 days of paid annual leave.
The change sits behind the scenes. You now need stronger evidence that the worker received the correct leave and the correct holiday pay.
This distinction matters because many people search for “annual leave changes” expecting a new holiday allowance. The accurate answer is more specific: the April 2026 change creates a 6-year record-keeping obligation.
What annual leave and holiday pay records must employers keep?
Adequate records are records that allow you to show:
- what holiday a worker had,
- what holiday they used,
- what holiday they carried over,
- what they were paid,
- how that pay was calculated.
A final payslip figure alone may not be enough if it does not explain the calculation behind the payment.
You should be able to retrieve records that show:
- Holiday taken – dates, duration, approval status, and the relevant leave year.
- Holiday carried over – unused leave moved from a previous year, with the reason for carry-over.
- Holiday pay – the amount paid, the pay period, and the payroll record.
- Pay components – details of bonuses, commission, overtime, allowances, or other variable pay included in the calculation.
- Payments in lieu – payments for unused holiday, especially when someone leaves employment.
- Calculation evidence – reference periods, rates used, source data, and the method behind the final amount.
For a salaried employee with fixed pay, this may be simple. For a sales employee with commission, a shift worker with overtime, or a zero-hours worker with variable hours, the record needs more detail.
The more complex the working pattern, the more important the audit trail becomes.
What does “adequate records” mean for HR and payroll?
The word “adequate” should be read as useful, complete, and retrievable.
A record is weak if it exists but cannot answer a basic question about entitlement or pay. For example, a spreadsheet showing that a worker took “5 days holiday” does not prove whether the worker had enough entitlement, what rate was used, or whether commission should have been included.
A stronger record connects HR and payroll data. It links the leave request, entitlement balance, worker category, pay history, calculation method, and final payment.
That gives you a defensible record if a worker questions their holiday pay months or years later.
This is where structured absence software can help. If you currently manage leave through emails and spreadsheets, review whether that setup can preserve a reliable 6-year record. Tools such as Calamari can help centralise absence records and reduce gaps between leave requests, approvals, and payroll inputs.
Annual leave record-keeping checklist for employers
Start with a simple test: could you explain a holiday payment from April 2026 using only records already stored in your HR and payroll systems?
If the answer is no, your process needs work.
Use this checklist to identify gaps:
- Check that your HR system records holiday taken and carried-over leave clearly.
- Confirm that payroll stores calculation details, not just final payment amounts.
- Link variable pay data to holiday pay where commission, overtime, or bonuses are relevant.
- Update retention settings so holiday records are not deleted before the 6-year period ends.
- Document your reason for retaining holiday data under UK GDPR.
- Create a leaver checklist covering final entitlement, overused leave, unused leave, and payment in lieu.
- Train managers, HR teams, and payroll teams on the new evidence standard.
- Review your holiday policy so it explains how leave is requested, approved, carried over, paid, and recorded.
Examples: where employers can get caught out
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Sales employee with commission
A sales employee takes 10 days of annual leave in June 2026. Payroll pays holiday at basic salary only because commission data sits in a separate system.
In 2028, the employee asks whether their holiday pay was too low.
If the employer only has a payslip and a calendar entry, it may struggle to explain the calculation. If the employer has leave dates, reference pay data, commission records, calculation notes, and the final payroll output, the position is much stronger.
Zero-hours worker with changing hours
A zero-hours worker works different hours each month. Their holiday accrual and holiday pay may depend on hours worked and pay received during the relevant period.
If rota data, timesheets, and payroll records sit in separate places, gaps can appear quickly.
For this group, retain the source data behind the calculation. Keep timesheets, rota records, pay period data, leave accrual records, and holiday pay calculations together or clearly linked.
Employee leaving the business
When employment ends, holiday records often become more sensitive.
You need to show final entitlement, holiday already taken, unused holiday, overused holiday if relevant, and any payment in lieu. A leaver record should make the final payslip easy to explain.
How the Fair Work Agency changes the risk picture
The Fair Work Agency was established on 7 April 2026 as part of the wider employment rights reform programme.
Its role includes enforcement of employment rights, including holiday pay. That makes record quality more important because employers may need to produce evidence, not just state that payments were correct.
Acas warns that if an employer cannot prove it has holiday records, this could be a criminal offence. Possible enforcement action may include demands for holiday pay underpayments and additional financial penalties.
How Calamari supports annual leave record-keeping
Calamari connects directly with the new record-keeping expectations introduced by the Employment Rights Act 2025.
If employers must keep annual leave and holiday pay records for at least 6 years, they need a process that captures leave requests, approvals, balances, carry-over, and absence history in a structured way.
Calamari’s leave management features help teams move away from scattered emails and manual spreadsheets by centralising time-off requests, approval workflows, absence calendars, leave balances, and reports in one system.
Calamari supports leave tracking and exportable reports, which can make it easier to maintain a consistent audit trail. It does not replace legal or payroll advice, but it can help employers organise the leave data they need to review, retain, and share when a worker asks a question or when records need to be checked.
What to do next
The Employment Rights Act 2025 turns holiday record-keeping into a long-term evidence task.
You require records that show what happened, why it happened, and how each holiday payment was calculated. Start with your highest-risk groups: workers with variable pay, irregular hours, zero-hours contracts, commission, overtime, or frequent leaver payments.
Review your HR and payroll workflow now. Close gaps between leave requests, approval records, timesheets, pay data, and final payroll outputs.
The stronger your records are today, the easier it will be to answer a worker query, correct a payroll issue, or respond to enforcement scrutiny later.
Sources
- Acas: Keeping records – Holiday entitlement: https://www.acas.org.uk/checking-holiday-entitlement/keeping-records
- Acas: Employment Rights Act 2025: https://www.acas.org.uk/employment-rights-act-2025
- GOV.UK: Holiday entitlement: https://www.gov.uk/holiday-entitlement-rights
- GOV.UK: Plan to Make Work Pay and Employment Rights Act - timeline update: https://www.gov.uk/government/publications/implementing-the-plan-to-make-work-pay-and-employment-rights-act/plan-to-make-work-pay-and-employment-rights-act-timeline-update
- Legislation.gov.uk: Employment Rights Act 2025: https://www.legislation.gov.uk/ukpga/2025/22/contents
FAQ: Employment Rights Act 2025: changes to annual leave
How long must employers keep annual leave records?
Employers must keep annual leave and holiday pay records for at least 6 years from the date the records are made.
What holiday records should be kept?
Employers should keep records of holiday taken, holiday carried over from previous years, holiday pay, and payments in lieu of unused holiday. Holiday pay records should show which pay elements were included, such as commission, bonuses, or overtime where relevant.
Does the rule apply to zero-hours workers?
Yes. The record-keeping duty applies to workers, so employers should include zero-hours, irregular-hours, part-year, and casual workers in their holiday records process.
Does this change the 5.6-week statutory holiday entitlement?
No. The April 2026 change does not increase statutory holiday entitlement. It requires employers to keep stronger records showing compliance with annual leave and holiday pay rules.
Can employers keep records in a spreadsheet?
Yes, employers can keep holiday records in a format they consider reasonable. However, the format must preserve complete and accessible records for at least 6 years.
