Holiday record keeping is changing from 6 April 2026

Holiday record keeping is changing from 6 April 2026: what employers need to do now

If holiday tracking is currently managed through emails, spreadsheets that are not consistent, or (worst case) memory, it is time to tighten the process. From 6 April 2026, employers will be required to keep adequate records of statutory annual leave and holiday pay for six years. There is no prescribed format, but the records must be clear, accurate, and accessible.

What's changing (in plain English)

From 6 April 2026, employers must be able to evidence, for each worker:

• What statutory holiday entitlement applies (including the split between ordinary and additional statutory leave)
• How much statutory leave has been taken, and what has been carried forward (where applicable)
• How statutory holiday pay was calculated (including what was included and excluded)
• Any payment in lieu of leave (including where entitlement has been carried over)

If a business cannot show this clearly, it is exposed. It becomes harder to defend holiday pay challenges, harder to resolve disputes quickly, and harder to demonstrate compliance if challenged.

What adequate records actually means

Adequate is not about having a fancy system. It is about being able to show a clear audit trail. Your records should be accurate, up to date, consistent, and accessible.

Holiday pay calculation: what to record (and the GOV.UK basics)

Holiday pay is one of the most common areas where businesses fall down, because the calculation can vary depending on how the worker is paid.

Workers with fixed hours and fixed pay

Holiday pay is normally based on the worker's usual pay for their normal working hours.

Workers without fixed hours and/or pay (variable hours/variable pay): regular overtime is included

For workers with variable hours and/or variable pay, holiday pay is based on an average of what they have actually been paid over the relevant reference period. That means regular overtime is included in holiday pay where it forms part of the worker's normal pay during the reference period.

Which weeks are excluded from the reference period

When working out the average, certain weeks are not counted and the employer should look further back to find enough paid weeks. In practice, exclude:

• Any week where any form of statutory payment was paid (even if it was paid for only one day in that week)
• Any week with zero pay (for example, authorised unpaid leave)

What to record (audit trail)

To evidence the calculation, keep a clear record of:

• The reference period used and the dates covered
• The weeks included (paid weeks) and the pay elements included (showing that regular overtime was included where paid)
• The weeks excluded and the reason for exclusion (statutory payment week / zero pay week)
• The final average figure used to calculate holiday pay

Options for getting this right (without overcomplicating it)

There is no one size fits all. The right option depends on headcount, complexity, and how confident managers are with process.

Option 1: A structured Excel tracker (simple, cheap, effective if controlled)

A well built spreadsheet can be compliant if it is consistent and maintained properly. The key is structure and version control.

A practical tracker usually includes:

• Employee details tab (name, start date, working pattern, entitlement basis)
• Entitlement tab (ordinary vs additional leave, pro rating, carry forward rules)
• Leave taken tab (dates, hours/days taken, leave taken and carried forward)
• Holiday pay audit tab (reference period dates, included/excluded weeks, pay elements included, calculation output)
• Payments in lieu tab (where applicable, with reason and calculation)

If you use Excel, set clear rules:

• One owner of the master file
• A consistent approach to recording leave (not manager emails HR and HR guesses later)
• A monthly check to reconcile what is recorded vs what has actually been taken

Option 2: Use an HR system (HRIS) to centralise leave and pay records

For many SMEs, the biggest risk is not capability, it is consistency. An HRIS can reduce manual errors and create a cleaner audit trail.

Evolved HR has partnered with SEEDL as a recommended HRIS option for SMEs. A system like this can help centralise leave requests and approvals, track entitlement and carry forward, and support a more reliable holiday pay audit trail.

What employers should do now (practical checklist)

1. Map your current process: where does leave data live (emails, diary notes, spreadsheets, payroll notes)?
2. Standardise entitlement rules: ordinary vs additional leave, pro rating, carry forward, and how you record it.
3. Fix the audit trail: decide what you will record for holiday pay calculations and where it will be stored.
4. Train managers: approvals and recording must be consistent, not informal.
5. Choose your tool: structured Excel (controlled) or an HRIS such as SEEDL.
6. Set a retention rule: keep records for six years and make sure they are retrievable.