Bank Holidays and Employee Entitlement

We look at what employers need to know about bank holidays and employee entitlement for annual leave.

Do my employees have a legal right to bank holidays?

In the UK, employees do not have an automatic statutory right to take bank holidays off, whether paid or unpaid.

Under the Working Time Regulations, employees are entitled to 5.6 weeks of paid annual leave. However, the legislation does not require bank holidays to be provided in addition to this entitlement. Instead, how bank holidays are treated depends entirely on the terms set out in the employment contract.

How would contracts usually determine bank holiday entitlement?

Employers typically manage bank holidays in one of two ways:

• Including them within the statutory annual leave entitlement 
• Providing them as additional leave on top of statutory entitlement 

Whether an employee is entitled to take bank holidays off, and whether these are paid, comes down to contractual wording - not legal obligation.

Will employees receive extra leave in 2026/27?

The 2026/27 leave year includes more bank holidays than usual. However, this does not automatically result in increased leave for all employees.

Entitlement will depend on how contracts are structured:

• Bank holidays provided in addition to annual leave (no cap):
  Employees will receive the extra bank holidays as additional paid leave 
• Bank holidays included within total annual leave (or capped):
  There is no increase in overall entitlement 

Can you give an example of how this would work in practice? 

Key contract scenarios explained:

1. “X days, plus bank holidays”

Where contracts state, for example, “20 days’ annual leave plus bank holidays”, employees are entitled to all bank holidays in addition to their core annual leave.

Impact for 2026/27:

• Employees will benefit from the full number of bank holidays in that year (including any additional ones) 
• This results in extra paid leave compared to a standard year 

In practice:

• If the business closes on bank holidays, these are automatically taken as paid leave
• If the business operates as normal, employees who work on a bank holiday will typically receive time off in lieu 
• Employers retain control over when leave is taken but must ensure employees receive their full entitlement within the leave year 

2. “X days, including bank holidays”

Where contracts state, for example, “28 days’ annual leave including bank holidays”, the total leave entitlement is fixed.

Impact for 2026/27:

• Additional bank holidays are absorbed into the existing entitlement 
• Employees do not receive extra days off
• No changes to operations or leave allocation are required

3. Contracts with a bank holiday cap

Some contracts specify a fixed number of bank holidays, such as “20 days’ annual leave plus the usual 8 bank holidays”. In this case, entitlement is capped.

Impact for 2026/27:

• Employees are limited to the specified number of bank holidays 
• Any additional bank holidays do not increase entitlement unless the employer chooses to offer them 

How should I prepare for the 2026/27 leave year?

With changes to the number of bank holidays, employers should take proactive steps now.

• Review employment contracts: identify which entitlement structure applies across your workforce
• Check part-time calculations: confirm that bank holiday entitlements for part-time employees are pro-rated correctly to avoid potential inequality issues
• Plan operational cover: if your business remains open on bank holidays, ensure adequate staffing and clear processes for time off in lieu
• Communicate clearly with employees: set expectations early by explaining how bank holidays will be managed in the upcoming leave year.

Our HR experts work with businesses like yours every day. We will explain what these changes mean in practical terms and help you put the right measures in place without overcomplicating things.

Contact Stallard Kane for tailored advice.
Speak to our team to find out how we can help your business.
Email HR@skaltd.co.uk or call 01427 420 403 to get started.