April–March holiday years: the hidden bank holiday problem

There are eight bank holidays in England and Wales each calendar year. Employers whose holiday year runs from January to December don't usually encounter any difficulties in terms of working out whether an employee can take the bank holiday off under the terms of their contract, unless an extra bank holiday is granted, which last happened for the Queen's state funeral. 

But those employers whose holiday year runs from April to March have a dilemma for the next two holidays years. That's because in the holiday year 1 April 2026 to 31 March 2027, the Easter bank holidays fall on 3 and 6 April 2026 and 26 and 29 March 2027. That means that 10 bank holidays fall in that period, and only six in the subsequent April 2027 - March 2028 leave year.  

Does that mean that your staff can take 10 days this leave year and only six next leave year? 

The starting point is to look at the holiday clause in the employee’s contract of employment and then consider whether the employee is still getting at least 5.6 weeks holiday a year. 

We’ve set out below the most commonly used clauses relating to bank holidays and explain how they apply for leave years starting in April and ending in March. We’ve referred to 20/28 days holiday (equivalent to four or 5.6 weeks for people working full-time) to reflect commonly worded clauses for full-time employees. However, your contracts may specify a different number of days to reflect an employee’s part-time hours or their entitlement to additional contractual holiday.

‘20 days' holiday per year plus bank and public holidays’ or ‘four weeks’ holiday per year plus bank and public holidays

i) The employee is entitled to 30 days paid leave in 2026/27 - 20 days plus 10 bank holidays; and

ii) 28 days leave in 2027/28 - 22 days plus six bank holidays to comply with the minimum statutory holiday entitlement of 28 days. 

Employees are entitled to take all bank holidays that fall in their holiday year. They must also receive at least 28 days/5.6 weeks leave each year. You will need to fund these extra days.

‘28 days' holiday per year’ or ‘5.6 weeks' holiday per year’ 

i) The employee is entitled to 28 days paid leave in 2026/27; and

ii) 28 days paid leave in 2027/28.

If your business closes during bank holidays and you deduct those days from your staff's holiday allowance, they will have less choice about when to take their holiday in 2026/27 because 10 of their holiday dates will be needed to cover bank holidays. 

‘20 days' holiday per year plus eight bank holidays’

i) The employee is entitled to 28 days' paid leave in 2026/27 - 20 days plus eight bank holidays even though there are 10 bank holidays over this period *; and

ii) 28 days' paid leave in 2027/28 - 22 days plus six bank holidays to comply with the minimum statutory holiday entitlement of 28 days. 

* If your business closes during bank holidays you won't be able to deduct an additional two days' leave from the employee's 20 days leave in 2026/27 because those 20 days are separate from bank holidays. However, you could ask your staff to agree to this.  

‘28 days’/5.6 weeks' holiday year inclusive of bank holidays'.

i) The employee is entitled to 28 days' paid leave in 2026/27. The 10 bank holidays that fall during this period will be deducted from the employee's 28 day allowance giving them 18 days to take when they please; and

ii) 28 days' paid leave in 2027/28. The six bank holidays that fall during this period will be deducted from the employee's 28 day allowance giving them 22 days to take when they please.

‘5.6 weeks' plus bank holidays’ or 28 days holiday plus bank holidays'. 

i) The employee is entitled to 5.6 weeks/28 days' holiday plus 10 bank holidays in 2026/27; and

ii) 5.6 weeks/28 days' holiday plus six bank holidays in 2027/28.

Tips for dealing with April - March leave years

1. Make sure your staff understand whether they can take all 10 bank holidays off this holiday year and how it impacts their total annual entitlement.
2. If you operate an electronic holiday pay booking system, make sure that it correctly represents how much holiday they can take and whether or not bank holidays are deducted at source.
3. You must keep records to demonstrate that your staff have received the correct amount of statutory holiday and been correctly paid for it.
4. If your contracts give staff paid time off for bank holidays, consider changing your holiday year to reflect the calendar year as it's much easier to apply. Easter Sunday falls on the first Sunday after the first full moon that falls on or after 21 March and can therefore fall early one year and late the next.
5. You'll need to approach the matter carefully. If you have an appropriately worded variation clause in your staff contracts, you may be able to use that to change the holiday year. Take advice if you're not sure.
6. If the change isn't already authorised by the terms of the contract, you should consult employees or their representatives and with a view to getting them to agree to the change. You'll need to explain why you want to change the holiday year and what steps you are taking to ensure they don't lose out during the transition period.
7. Even if you think you're likely to reach agreement we recommend that you follow the steps set out in the statutory code of practice on dismissal and reingagement by providing information, engaging in meaningful consultation and exploring alternatives.
8. It's best to get this done as soon as you can. Changes coming into force in January next year will make it much more difficult for employers to change the terms and conditions of their staff. Changing the holiday year is not explicitly listed as a restricted variation under the Employment Rights Act 2025, but reducing the amount of holiday is. Changing the holiday year may impact the amount of holiday employee's receive during the interim period and could, therefore, be covered. 

Our newsletters

We publish monthly employment and education newsletters. If you'd like to be added to the mailing list, please let me know.