Understanding Annual Leave in Freepayroll

What is annual leave?

Annual leave is the paid time off work that employees are legally entitled to under the UK Working Time Regulations 1998. Annual leave is paid through payroll as part of an employee’s normal earnings.

How much annual leave is an employee entitled to?

Most employees are entitled to 5.6 weeks of paid annual leave per leave year. For a full-time employee working 5 days per week, this equals 28 days per year. This entitlement may include bank holidays, depending on the employer’s policy.

How is annual leave paid for salaried employees?

Salaried employees are paid their normal salary when they take annual leave. There is no reduction or increase in pay due to taking holiday.

How is annual leave paid for hourly or variable-pay employees?

Holiday pay is calculated using the employee’s average pay over the last 52 paid weeks. Weeks with no pay are ignored when calculating the average.

How to add an Annual Leave in Freepayroll:

1. Add an Annual Leave

• Go to ‘People’.
• Click the Edit icon next to the employee’s name.
• Open the ‘Absences’ tab.
• Under Absence Type, select Annual Leave.
• Choose the period the employee will be on leave.

2. View in Calendar

• The Annual Leave period will appear in the calendar, highlighted in blue.
• Use the color legend below the calendar to identify different absence types.

3. Check Absence History

• In the same section, open the ‘Absence History’ tab (next to Add Absence) to review previous leave records.

Updated on: 12/06/2026