Holiday pay- What employers need to know

Holiday Pay Records: What Employers Need to Know

Are your holiday records up to date? New rules mean employers now need to keep holiday entitlement and pay records for six years and it is very important to make sure your business is prepared.

There are currently about 2.73 million VAT and/or PAYE businesses in the UK, which means a huge number of employers will be affected by these requirements.

From 06/04/2026, employers must keep records of employees annual leave and holiday pay for at least six years.

The records below tell us,

• How much annual leave an employee is entitled to.

• Holidays that have been taken.

• Holidays that have been carried over from previous years.

• Holiday pay that has already been paid.

• Holiday payments made after an employee has exited the company

• Information used to calculate holiday pay.

The records can be kept electronically or in another suitable format, but employers must be able to produce the information when required.

The six-year period brings holiday records in line with existing National Minimum Wage record keeping requirements.

This matters to employees because

Holiday entitlement and pay can be overlooked as just a HR or payroll responsibility. However, accurate records are very important to demonstrate that your business is meeting the legal requirements.

If a dispute arises over holiday entitlement or pay, having a clear record will help demonstrate exactly what holidays an employee was entitled to, what leave they took and what they were paid.

Without clear and reliable records, it is harder for an employer to prove that the processes were followed correctly.

What should employers be doing?

You should look at your current processes and make sure your records are accessible and accurate.

Check your holiday records and make sure you can clearly see each worker’s entitlement, leave taken and holiday pay.

Review your payroll processes and Ensure holiday pay is being calculated correctly for everyone.

Check your record retention and ensure your systems can securely hold records for at least 6 years.

Review your temporary workforce and for agency workers, make sure you understand how holiday entitlement and pay are being managed and recorded.

Check your timesheets as accurate timesheets are crucial for temporary workers and can help ensure that hours, pay and holiday calculations are correct.

How can your recruitment agency help?

Recruitment is only one part of the challenge. Once workers are in place, there are also responsibilities around payroll, working hours, holiday entitlement and compliance.

A good recruitment agency is a partner that will help make this an easy and straightforward process.

If you regularly use temporary or flexible workers, it's worth speaking to your recruitment provider to make sure everyone understands their responsibilities and the right information is being documented.

The bottom line

The new six-year holiday record requirement reminds us how important it is to keep our records accurate.

For employers, review your processes, keep your records accurate and make sure everything is in place and that you are using the correct recruitment partner.

If you're recruiting permanent or temporary staff and want a recruitment partner you can rely on, get in touch with Tech Trade today to discuss how we can support your business.