In a small team, one person on holiday can be a fifth of your capacity. Two people off in the same week can stop work altogether. Yet most small businesses still run leave through a mix of messages, a shared calendar and a spreadsheet that one person updates when they remember.
That works until it does not. Someone books a week that clashes with a colleague, an allowance is miscounted, or a new starter asks how many days they have left and nobody can say for sure.
This guide covers how to write a simple leave policy, how to handle requests and approvals, how to count allowances accurately and how to keep the record you need without extra admin.
Start with a short written policy
A leave policy does not need to be long. It needs to answer the questions people will otherwise ask you one at a time. Write it down, share it with everyone and point new starters to it on their first day.
- The allowance. How many days each person gets, and whether public holidays are included in that number or given on top.
- The holiday year. When the year starts and resets. Many businesses use January, others use April or each person's start date. Pick one date for everyone if you can, as it is far easier to manage.
- Carryover. Whether unused days can roll into the next year, and if so how many.
- Notice. How far in advance people should ask, with longer notice for longer breaks.
- Busy periods. Any times of year when leave is limited, such as a seasonal peak or year end.
- How to ask. One place to request leave, and who approves it.
Know the legal minimum
In the UK, most workers are entitled to 5.6 weeks of paid annual leave a year. For someone working five days a week that is 28 days, and you can choose whether bank holidays count towards it. Part time staff are entitled to the same 5.6 weeks, worked out on the days they actually work.
You can offer more than the minimum, and many employers do as a simple benefit. You cannot offer less. Rules for irregular hours and part year workers, sick pay and family leave are more detailed, so check the current guidance on GOV.UK before you finalise your policy. If you employ people outside the UK, local rules will differ.
Use one place for every request
The single biggest improvement most teams can make is to stop accepting leave requests in chat, email and corridor conversations. Every request should go through one place, with the dates, the type of leave and an optional reason, so nothing is lost and everyone can see where their request stands.
Separate the types of leave from the start. Annual leave comes out of an allowance. Sick leave and unpaid leave usually do not, but you still want a record of them. Lumping everything together makes allowances wrong and patterns impossible to spot.
Allow half days. People often need a morning for an appointment or an afternoon to travel, and booking a whole day for it wastes their allowance or encourages them not to book it at all.
Make approvals fair and quick
Decide who approves leave. In most small businesses it is the person's manager, with an owner or administrator able to step in when the manager is away. Write that down so people know who to chase.
- Respond quickly. People book travel around your answer. A request left for a week is a request that causes resentment.
- Check cover, not just the calendar. Before approving, look at who else is off in the same period and whether the work can be covered.
- Be consistent. First come, first served is the simplest rule for popular weeks. Whatever rule you use, apply it to everyone.
- Always give a reason for a refusal. A short explanation, and a suggestion of other dates, keeps a no from feeling arbitrary.
Count allowances accurately
Most allowance arguments come from counting. A request from Thursday to the following Tuesday is three working days, not six, and if Monday is a bank holiday it may only be two. Counting by hand invites mistakes.
Exclude weekends and public holidays automatically, count half days as half, and show each person their total allowance, what they have used, what is waiting for approval and what is left. When people can see their own numbers, most of the questions stop.
Decide what happens at the end of the holiday year before it arrives. If you allow carryover, set a cap so days do not pile up indefinitely, and remind people a couple of months before the reset so they can book what they have left.
Make leave visible to the team
Approved leave should appear on a shared calendar so the rest of the team can plan around it. It avoids clashes before anyone requests them, helps whoever is covering and means nobody is surprised when a colleague is not around on Monday.
Keep a reliable record
You need an accurate record of the leave each person has taken and the leave they are owed, both to pay people correctly and to settle any dispute later. A record that lives in one place, with who approved what and when, is far more reliable than a spreadsheet rebuilt from memory.
The record also tells you things. Frequent short sickness absences, people who never take their holiday and teams where leave always clusters in the same weeks are all worth a conversation.
How Wizard Application helps
Wizard Application includes time off as part of its HR software, so requests, approvals and allowances sit alongside the rest of your team records.
- One place to request leave. Team members request annual, sick, unpaid or other leave, choose a full day, morning or afternoon for the first and last day and add an optional reason. Pending requests can be cancelled at any time.
- Accurate working day counts. Weekends and the public holidays you set up, one off or recurring every year, are excluded automatically.
- Allowances everyone can see. Set a default allowance, the date your holiday year starts and whether carryover is allowed, up to a maximum. Each person sees their total, used, pending and remaining days.
- Clear approvals. Requests go to the person's manager, administrators and anyone you give permission to manage time off. A refusal needs a reason, and the requester is notified either way.
- Leave on the calendar. Approved time off appears on the calendar, so the team can plan around it.
Frequently asked questions
How much holiday are employees entitled to in the UK?
Most workers are entitled to 5.6 weeks of paid annual leave a year. For a five day week that is 28 days, which can include bank holidays.
Can an employer refuse a holiday request?
Yes, for good business reasons such as cover during a busy period. Be consistent, explain the reason and suggest other dates where you can.
Should unused holiday carry over?
That is your choice above the legal minimum, and it can be set in your policy. If you allow it, set a maximum and remind people to book their remaining days before the year resets.
Should sick leave come out of the holiday allowance?
No. Record sick leave separately from annual leave so allowances stay accurate and you can spot patterns of absence.
Do bank holidays count as part of the allowance?
They can. In the UK you can include bank holidays in the 5.6 week entitlement or give them on top. State which in your policy so there is no confusion.
Leave is one part of looking after your team. If you are bringing new people on board, our employee onboarding checklist covers setting them up properly from day one, and our guide to roles and permissions explains how to decide who can approve what.
