New Holiday Record‑Keeping Rules from 6 April 2026: What Employers Need to Do (and How to Do It)
From 6 April 2026, UK employers face a new legal obligation: they must keep adequate records to show they have complied with statutory holiday entitlement and holiday pay rules.
This has always been good practice but it is now a statutory duty introduced under the Employment Rights Act 2025, enforced through the Working Time Regulations, with oversight by the new Fair Work Agency.
In this post I explain:
- what the new duty requires
- what records must be kept
- how this might works in practice using Xero, BrightPay or other systems
What has changed from 6 April 2026?
From 6 April 2026, all employers must keep holiday and holiday pay records for at least six years.
The duty applies to all workers, including:
- full‑time and part‑time employees
- irregular‑hours and zero‑hours workers
- part‑year workers
There is no prescribed format. Records can be kept in any form the employer reasonably considers appropriate, provided they clearly show compliance. However, if an employer cannot produce adequate records when required, this may constitute a criminal offence.
What holiday records must employers keep?
From 6 April 2026, employers must be able to evidence the following:
Holiday taken
Dates and the amount of leave taken are recorded in days or hours. Where relevant, employers should be able to distinguish a statutory holiday from any additional contractual leave.
Holiday carried over
Any statutory holiday carried forward into a later leave year, including evidence of the amount carried over.
Holiday pay
The amount of holiday pay paid and clear details of how it was calculated. This includes showing which pay elements were included, such as overtime, commission or bonuses, where relevant.
Payments in lieu of holiday
For example, sometimes payments are made for untaken holiday when employment ends.
These records must be retained for six years from the date they are created.
Interaction with earlier holiday pay reforms
The holiday pay reforms introduced in 2024 continue to apply. In particular:
- irregular‑hours and part‑year workers may accrue holiday using the 12.07 percent method
- rolled‑up holiday pay remains lawful for those workers, provided it is itemised on payslips
What changes from April 2026 is that employers must now be able to prove, through records, that these rules have been applied correctly.
How Xero Payroll may help
Xero Payroll can support compliance if it is set up carefully.
Good practice includes:
- correctly classifying workers as regular or irregular hours
- using hour‑based holiday tracking where appropriate
- ensuring holiday taken is recorded within the system, rather than informally
- retaining payslips and payroll reports as part of the holiday audit trail
Where rolled‑up holiday pay is used, most employers will still need a separate method of recording when holiday is actually taken, because staff are paid holiday pay with their wages rather than at the time leave is taken.
Payroll records alone are often not sufficient unless leave booking is also captured clearly. It will be down to the employeer and employee to make sure this is recorded, your payroll provider does not know what holiday is taken unless that information is provided.
Using BrightPay
BrightPay allows holiday pay to be processed, but it does not automatically manage the full holiday record‑keeping obligation.
In practice:
- Holiday pay amounts are often entered manually
- rolled‑up holiday pay calculations are typically performed outside the software
- A separate system is needed to track holiday taken, carry‑over and payments in lieu
Where BrightPay is used, we believe it will be important to maintain a clear, structured record of leave outside the payroll system and retain payroll reports as supporting evidence.
Other tools and practical approaches
The legislation is flexible about how records are kept. Employers can use:
- payroll systems
- HR or leave‑management platforms
- spreadsheets or databases
The key requirement is that records are complete, consistent and retrievable. If you use a HR tool this may include a holiday tracking tool or oyu may keep a spreadsheet. Consider how you currently record holiday requests and keep track of how much employees have left, and whether this can be adapted.
Employers should be able to answer, at any point:
- how much statutory holiday a worker took
- how their holiday pay was calculated
- whether holiday was paid, carried over or paid in lieu
Is this change retrospective?
The new duty is not retrospective.
It applies from 6 April 2026 onwards and covers records created on or after that date. Employers do not need to recreate historic holiday records for earlier years where the legal duty did not yet exist.
However, where a leave year spans 6 April 2026, records should be complete and compliant from that date forward. Any future inspection or enforcement action will focus on periods after 6 April 2026.
Final thoughts
The new rules do not change how much holiday workers are entitled to. What they change is the standard of evidence employers must hold.
For many organisations, the main risk is assuming that payroll software alone will meet the requirement. In practice, payroll systems need to be supported by clear leave‑tracking processes.
If you are unsure whether your current setup using Xero, BrightPay or another system meets the new legal standard, now is the right time to review it.
