Employers Now Must Keep Records of Annual Leave and Holiday Pay

From 6^th April 2026, employers are now required to keep detailed employee annual leave and holiday pay records for a minimum of six years from the date they were made. 

For each of their employees, employers should record:

• Holiday taken
• Holiday carried over from previous years
• Holiday pay
• Payments in lieu of holiday, e.g., payment for any untaken leave when an employee’s employment ends.
• Holiday pay transparency, employers should clearly set out what is included in holiday pay, such as bonuses or commission.

Ways to keep records

While there is no specified format for records, they must be clear, accurate and accessible. You can either use your HR systems or a spreadsheet. 

Enforcement will come under the remit of the Fair Work Agency, which was established on 7^th April 2026. They will have the power to inspect records and take action where employers fail to comply.  The maximum penalty for non-compliance is likely to be unlimited fines.

Other enforcement action might include:

• Underpayments of holiday pay to be paid
• Additional financial penalties

What do employers need to do?

• Review current annual leave and holiday pay processes
• Continue to track annual leave and holiday pay
• Check data privacy/protection and retention policies to ensure they align with the six-year requirement for keeping holiday records.
• Ensure that your HR systems are compliant in providing the detailed information
• Keep records in line with UK GDPR.

How can HR Software help

We are partnered with oneHR, a provider of HR and Health & Safety software. Their HR software can help support you with this new obligation, making the process efficient and stress-free.

The oneHR system can:

• Automatically track employees’ annual leave balances and usage
• Clearly record what leave was paid and unpaid
• Store annual leave records securely for the required retention period, with easy access when needed
• Provide clear audit trails and reports for compliance checks
• Reduce administrative workload and risk of manual errors

If the Fair Work Agency visits your business, you need to be able to provide clear evidence that you are complying with this new requirement. HR software can help you do exactly that, giving you secure, accessible records wherever you are.

To find out more and to request a demo of oneHR, please get in touch with the team.

To find out more or discuss maintaining records for annual leave and holiday pay, please get in touch with our team of experts.

T: 0330 107 1037

E: contact@hpc.uk.com

LinkedIn: High Performance Consultancy