New Employer Duty to Keep Holiday & Holiday Pay Records
While this may sound like a small compliance change, it puts much more emphasis on being able to show how holiday entitlement and pay have been managed — not just that calculations were done correctly.
Why Is This Important?
The newly established Fair Work Agency can investigate an employer if there is concern raised that a worker has not received their full annual leave or holiday pay entitlement.
In practice, employers should be able to show six years of records demonstrating:
- Holiday entitlement and accrual
- Holiday taken and remaining balances
- Any carry-over between leave years
- How holiday pay has been calculated
- Payments made in lieu of holiday pay during employment and on termination
There is no specific format outlined for these records, but they must be accurate, accessible and sufficiently detailed if queried.
Questions to Ask Yourself
Q: Could you produce detailed holiday records today, based on your current system?
Q: Do you need to take the time to review your holiday record keeping system to be ready for any future requests?
For businesses currently relying on spreadsheets, emails or manual workarounds, now is a good time to review whether your current approach is fit for purpose — particularly given the need to store records securely for six years.
Where your payroll system has the functionality, it is a good option to add holiday pay on payslips, as this supports transparency and creates a real time record of what has been paid and when.
A structured digital HR system can make holiday (and other leave) recording far simpler. As part of our HR support service, we offer access to Breathe HR, a user-friendly system for SMEs that keeps holiday records in one secure place with a clear audit trail.
If you’re unsure whether your holiday records or calculations meet the new requirements, you can contact Rona and Louise at support@mckineyHR.co.uk.
We can check your current Excel or other manual system is compliant or, if you would like to explore HR software options, we’re here to help.
Frequently Asked Questions
Do I need to keep holiday records in a specific format?
No. The law does not require a specific format, but records must be clear, accurate, accessible and capable of showing how holiday and holiday pay have been handled.
How long do holiday records need to be kept?
Records should be retained for up to six years, so employers need a system that supports long-term, secure storage.
What if we don’t have six years of historic holiday pay records?
The new duty applies from 6 April 2026 onwards. Employers are not expected to recreate six years of historic records immediately if they do not already exist.
What matters is that employers start keeping clear, compliant records going forward and retain them for up to six years.
If an employee raises a concern about past holiday pay, employers may still be asked to explain how holiday pay was calculated at the time, using the information reasonably available.
Introducing proper record-keeping now is viewed positively and shows a commitment to compliance.
The greater risk arises if, after April 2026, holiday and holiday pay records are still unclear, incomplete or inconsistent.
Is a spreadsheet acceptable?
Spreadsheets can still be used, but alone they can make it harder to demonstrate accuracy, consistency and confidentiality — especially over several years or if challenged.
Do I need to record holiday pay calculations as well as days taken?
Yes. Employers should be able to evidence not just time off taken, but how holiday pay has been calculated and paid.
Should holiday pay appear on payslips?
Where a payroll system allows this, showing holiday pay separately on payslips is good practice. It helps demonstrate holiday pay made in real time and provides an additional clear record for both employer and employee.
Can you help us check our current setup?
Yes. We can review contracts, holiday entitlement and holiday pay calculations, and advise whether your records meet the new requirements.
What is Breathe HR and how do we access it?
Breathe HR is a digital HR system that helps manage holidays and HR records securely. We can provide access and support as part of our ongoing HR support service.