Annual Leave Policy Template (Free)

Most small companies don't have a written leave policy until the first argument about it — someone books three weeks in December, two colleagues clash over the same dates, or a leaver expects to be paid for days they didn't actually accrue. A one-page policy prevents nearly all of it.

Here's a free annual leave policy template you can copy, plus a plain-English guide to what each section is for.

Why you need a written leave policy

A leave policy isn't bureaucracy — it's the rulebook that lets everyone self-serve. It answers the questions that otherwise land on your desk:

• How many days do I get?
• How do I request time off, and who approves it?
• Can I carry days into next year?
• How much notice do I need to give?

Write it once, and "how does leave work here?" stops being a recurring conversation.

What every annual leave policy should include

1. Entitlement — how many days per year, and whether public holidays are on top or included.
2. Leave year — the dates your allowance runs (e.g. 1 Jan–31 Dec, or each person's hire-date anniversary).
3. Accrual — whether the full allowance is available from day one or builds up monthly.
4. Pro-rata — how entitlement is reduced for part-timers and mid-year starters.
5. Carry-over — how many unused days roll over, any cap, and when they expire.
6. Requesting & approving — the process, the approver, and how far ahead to ask.
7. Notice periods & limits — minimum notice, and any cap on how many people can be off at once.
8. Sickness vs. holiday — making clear they're separate.

The template (copy this)

Annual Leave Policy — [Company Name]

1. Entitlement. Full-time employees receive [25] days of paid annual leave per leave year, in addition to public holidays. Part-time employees receive a pro-rata amount.

2. Leave year. Our leave year runs from [1 January to 31 December].

3. Accrual & new starters. Annual leave accrues at [1/12 of the annual allowance each month]. Employees joining mid-year receive a pro-rata entitlement based on their start date.

4. Carry-over. Up to [5] unused days may be carried into the next leave year and must be used by [31 March]. Days beyond the cap are lost unless agreed in writing.

5. Requesting leave. Submit requests through [Absenca] at least [2 weeks] in advance. Your manager will approve or decline, normally within [3 working days].

6. Limits. To maintain cover, no more than [X] people in a team may be on leave at the same time. Certain dates may be designated as blackout periods.

7. Sickness. Sick leave is separate from annual leave and is covered by our sickness policy.

8. On leaving. Accrued but untaken leave will be paid in the final salary; leave taken in excess of accrual may be deducted.

Swap the bracketed values for your own and you have a usable policy in minutes.

Tips for a policy people actually follow

• Keep it to one page. Nobody reads a ten-page policy.
• Make requesting frictionless. If booking leave is a chore, people stop giving notice — which is how clashes happen.
• Be explicit about carry-over. "Use it or lose it" only works if it's written down and enforced.
• Review it yearly. Entitlements and statutory minimums change.

From policy to practice

A policy on paper still relies on someone remembering to apply it. A leave tool enforces it automatically: Absenca calculates entitlement and pro-rata, applies your carry-over cap and expiry, routes requests to the right approver, and blocks bookings during blackout periods or when too many people are already off. Public holidays for your country are built in. It's free for up to 15 people.

Frequently asked questions

Are public holidays part of annual leave? That's your choice — state it clearly. Many policies give annual leave plus public holidays; others include them. Just don't leave it ambiguous.

Do we have to allow carry-over? Usually not beyond any statutory minimum, but a small cap (e.g. 5 days) is a common, goodwill-friendly middle ground. Check your local rules.

What's the difference between this and a sick leave policy? Annual leave is planned, paid time off. Sick leave is unplanned absence due to illness and should be tracked separately — often with absence metrics like the Bradford Factor.

---

Skip the spreadsheet entirely — Absenca applies your leave policy automatically, free for up to 15 people. Next: how to calculate pro-rata holiday entitlement.