When does unused holiday carry over to the next year?

This one applies to every employer – no size threshold, no exceptions.

The general rule is that the four weeks of core statutory leave under regulation 13 of the Working Time Regulations cannot be carried into the next year. But there are three situations where it can – and they matter more than most employers realise.

A worker can carry over up to four weeks in three situations:

• They could not take leave because they were on family-related leave, such as maternity, paternity, adoption, shared parental, parental, parental bereavement, or neonatal care leave.
• They were on long-term sick leave. In this case the carried-over leave must be used within 18 months of the end of that leave year.
• You did not give them a reasonable opportunity to take it, did not encourage them to use it, or did not warn them they would lose it at year end.

The duty in the third situation was clarified by the European court in Max-Planck-Gesellschaft v Shimizu (2018, CJEU) and written into UK law by the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 with effect from 1 January 2024. The work here is on you, not them. You must tell each worker how much leave they have left, encourage them to use it, and warn them if they're going to lose it. If you don't, the leave rolls over automatically – and keeps rolling until you put the process right.

In practice, that means sending each person a leave-balance reminder mid-year and again near year end. An employer who says no when things are busy, tracks nothing, and writes off the balance at year end is not meeting the duty.