Annual Leave
Also known as: holiday entitlement, vacation days, annual holiday
Annual leave is the paid time off employees accrue each year for rest and holidays, separate from sick leave or public holidays.
Annual leave (also called holiday entitlement, vacation, or annual holiday) is the paid time off an employee is entitled to take each leave year for rest, travel, or personal reasons. It is granted on top of public holidays and is distinct from sick leave, parental leave, and other absence categories.
Most organisations express annual leave as a fixed number of days or hours per year — for example 25 days plus public holidays — which employees request and managers approve. Entitlement is often pro-rated for part-time staff and for people who join or leave partway through the leave year.
How annual leave is tracked
Each employee has a leave balance that starts at their yearly entitlement and decreases as approved leave is taken. Depending on the policy, unused days may be carried over into the next leave year, paid out, or forfeited.
Tracking annual leave accurately matters because it affects payroll, staffing, and statutory compliance. Spreadsheets struggle once you add part-timers, carry-over rules, and multiple offices — which is why teams move to a dedicated leave tracker.
Example
An employee entitled to 25 days who has taken 10 and has 2 approved upcoming has a remaining annual-leave balance of 13 days.
Frequently asked questions
- Is annual leave the same as PTO?
- They overlap. 'PTO' (paid time off) is a US term that often pools holiday and sick days into one bank, while 'annual leave' usually refers specifically to paid holiday and is tracked separately from sick leave.
Related terms
Stop calculating this by hand
Absenca handles accrual, carry-over, pro-rata, and public holidays automatically — so every balance is right without a spreadsheet. Free for up to 15 people.