What Is Paid Time Off (PTO) in the UK and How Does It Work?

Paid time off (PTO) is a benefit all employees, whether full-time or part-time, are entitled to in the UK. Simply put, PTO allows employees to take time off work while still receiving their normal salary, though there are specific rules governing its application.

What Is PTO? Statutory Versus Contractual Entitlement

When considering what is PTO in the UK, it is essential to distinguish between statutory entitlement and contractual benefit.

An employee’s PTO entitlement is determined by a combination of legal statutes set by the government and any additional contractual paid time off offered by their employer. The details of both are typically outlined in the employment contract and employee handbook.

UK law requires that all employers provide employees with a written statement of particulars (also known as a principal statement) by day one of employment. This must outline the statutory PTO entitlement and any contractual enhancements. A more comprehensive written statement must follow within two months.

What Is PTO in the UK and How Does It Work?

Employees in the UK are entitled to several types of PTO, depending on their employment contract and statutory rights:

1. Statutory Annual Leave

• Full-time employees are entitled to 5.6 weeks (28 days) of paid holiday per year, including bank holidays.
• Many employers provide additional contractual annual leave; data shows the UK average is around 34 days, including bank holidays.
• Usage rules—including eligibility, notice requirements, and restrictions—should be communicated by day one of employment.

Paid time off (PTO) in the UK is a benefit that all employees are entitled to in the UK whether full-time or part-time. This means simply that when an employee does not attend work, they can continue to be paid their normal salary but there are very specific rules around its application.

What is PTO for part-time workers?

Part-time workers receive a pro-rata holiday entitlement based on their weekly hours. For example, if an employer offers 30 days PTO (including bank holidays) and an employee works three days a week, their PTO entitlement would be 18 days per year.

What is PTO for irregular-hours workers?

From April 1, 2024, a new PTO calculation method was introduced for casual, seasonal, and irregular hours workers. This method was designed to simplify the calculation of PTO entitlement for casuals, seasonal workers, and those who work irregular hours. 

This involved the reintroduction of the 12.07% calculation method for holiday pay. This means that employers can pay employees an additional 12.07% of their regular salary, as opposed to giving paid leave when they take a holiday which has proven to be a complicated process for irregular hours workers. This holiday payment must be clearly itemised on the payslip as a separate payment, however.

2. Bank Holidays

While there is no legal right to bank holidays off, many employers include them as part of statutory holiday entitlement. The UK typically has 8 bank holidays in England and Wales, 9 in Scotland, and 10 in Northern Ireland.

3. Sick Leave (Statutory Sick Pay – SSP)

Employees who meet the eligibility criteria can receive Statutory Sick Pay (SSP) of £116.75 per week (as of April 2024) for up to 28 weeks. Many employers offer enhanced sick pay schemes. There are specific eligibility requirements for SSP, the key ones being:

• Must earn at least £123 per week (before tax) in the tax year 2024/25
• Must be off sick for at least 4 consecutive days (including non-working days).
• SSP starts from the 4th qualifying day (first 3 days are unpaid unless covered by enhanced employer sick pay).

• Must inform their employer within their deadline (or within 7 days if no deadline is set).
• Employers may require a fit note (sick note) if the absence lasts more than 7 days.

Enhanced Sick Pay

Many employers offer enhanced sick pay schemes. For example, NHS employees under the Agenda for Change (AfC) receive up to six months’ full pay plus six months’ half pay depending on service length. While not representative of all industries, such enhancements demonstrate how employers can improve their PTO offerings.

4. Maternity Leave

Pregnant employees can receive up to 52 weeks of maternity leave, with **Statutory Maternity Pay (SMP) for up to 39 weeks. The PTO entitlement for maternity leave is as follows

• First 6 weeks – 90% of average weekly earnings (AWE) before tax.
• Next 33 weeks – £172.48 per week (or 90% of AWE, whichever is lower).
• Remaining 13 weeks – unpaid (if taking full 52-week leave).

While statutory PTO entitlements ensure employees have a baseline level of paid leave, many employers go beyond the legal minimum to offer enhanced PTO packages. These additional benefits—such as increased annual leave, and enhanced sick pay, can significantly improve a company’s employee value proposition.

By providing enhanced PTO, businesses can:

• Boost employee engagement and well-being.
• Improve retention rates by offering a more attractive benefits package.
• Strengthen their ability to attract top talent in a competitive job market.