A banked holiday is a day off work that an employer sets aside for you instead of giving you the day itself

When a public holiday falls on a day you normally work, your employer can choose to let you take that day off as scheduled, or they can "bank" it—meaning they owe you a day off at a different time. You don't lose the day; it goes into a bank of hours or days you can use later. The employer decides when you take it, or sometimes you negotiate together.

This is different from straightforward not working on a holiday. If a bank holiday falls on a Saturday and you don't work Saturdays anyway, there's nothing to bank—you weren't losing a workday. But if a bank holiday falls on a Tuesday and you work Tuesdays, your employer can either let you have Tuesday off or bank the day for later use.

Banked holidays are common in the UK and some other countries, but the rules vary by employer and by contract. Some employers bank holidays automatically; others only do it if you ask. Some let you choose when to take the banked day; others schedule it for you.

Key Takeaways

  • A banked holiday means your employer owes you a day off at a future date instead of giving you the public holiday itself.
  • Banked holidays typically happen when a public holiday falls on a day you normally work but your employer cannot close or cannot give you that specific day off.
  • Your contract or employee handbook should state whether banked holidays are part of your arrangement and who decides when you take them.
  • You do not lose a banked holiday—it remains owed to you and should be tracked by your employer or recorded in your payroll system.

When and why employers bank holidays

Employers bank holidays most often when a public holiday falls on a day the business normally operates. A retail store open on Boxing Day, a hospital, a factory running shifts, or a customer service centre might not be able to close. Rather than pay overtime or ask staff to work without compensation, the employer banks the day—you get a day off later instead.

Some employers bank holidays as a matter of policy, especially in industries that don't close for public holidays. Others do it only when necessary. A few employers bank holidays to spread time off across the year or to avoid giving everyone the same day off at once.

The key point: banked holidays are not lost wages or forfeited time. They are postponed days off that remain your entitlement.

How banked holidays appear in your pay and records

A banked holiday should show up in your payroll records as a day owed to you, not as a day you worked. Your payslip might list it separately, or it might be tracked in a holiday balance sheet your employer maintains. Some employers use a straightforward note in your file; others use payroll software that tracks banked days automatically.

You should be able to see your banked holiday balance the same way you see your regular holiday entitlement. If you cannot find it on your payslip or in your employee portal, ask your HR department or manager directly. They should be able to tell you how many banked days you have and when you can take them.

If your employer does not track banked holidays clearly, keep your own record—note the date the holiday was banked and any agreement about when you will take it. This protects you if there is a dispute later.

Who decides when you take a banked holiday

This depends on your contract and your employer's policy. Some employers let you request a date and approve it like any other holiday request. Others schedule banked holidays for you, sometimes on a date that suits the business better than it suits you. A few employers require mutual agreement—you and your manager decide together.

Your contract should say who has the final say. If it does not, ask your HR department or manager in writing. Getting this in writing protects you both and prevents misunderstandings later.

In some cases, if you leave your job, you may be owed payment for unused banked holidays instead of taking the day off. Again, your contract should spell this out. If it does not, the law in your country or region will determine what happens.

What happens if you leave your job with banked holidays unused

If you resign or are dismissed and have banked holidays still owed to you, you are usually may have access to to payment for those days. The amount depends on your daily rate of pay and the number of days banked. Your final payslip should include this payment, though it may take a few weeks to process.

If your final payslip does not include payment for banked holidays, contact your employer's HR or payroll department in writing and ask for an explanation. Keep a copy of your request. If the employer refuses to pay or does not respond, you may need to contact your local employment tribunal or labour board, depending on where you live.

Some employers try to avoid paying out banked holidays by claiming they were "use it or lose it" arrangements. This is not legal in most places—if a day was banked as part of your entitlement, you are owed for it when you leave, unless your contract explicitly stated otherwise before the day was banked.

Banked holidays versus regular holiday entitlement

A banked holiday is not the same as your regular paid holiday. Your regular holiday is time off you earn each year as part of your contract—typically 20 to 28 days depending on your country and employer. A banked holiday is an additional day owed to you because a public holiday fell on a working day and your employer could not give it to you then.

Both should count toward your total time off, and both should be tracked separately so you know exactly what you are owed. If your employer tries to count a banked holiday as part of your regular holiday entitlement, that is usually not correct—they are separate things.

Some employers offer a "holiday purchase" scheme where you can buy extra days off, or a "holiday carry-over" option where unused days roll into the next year. Banked holidays are different from both of these. They are days your employer owes you because of how public holidays fell in your working calendar.

Frequently Asked Questions

Can my employer refuse to let me take a banked holiday?

Your employer cannot refuse to give you a banked holiday indefinitely. You are may have access to to take it. However, they may have the right to decide when you take it, depending on your contract. If your contract says you and your manager must agree on the date, they can refuse a specific request if it conflicts with business needs—but they cannot refuse to give you the day off altogether. If there is a dispute, your employment tribunal can order the employer to pay you for the unused day.

What if my employer goes out of business and I have banked holidays left?

If your employer closes or enters insolvency, banked holidays are treated as wages owed to you. You may be able to claim payment through an insolvency fund or employment tribunal, depending on your country. Contact your local labour board or employment agency when ready if this happens. Keep records of all banked holidays and any written agreements about them.

Do banked holidays count toward my statutory holiday entitlement?

This varies by country and employer. In the UK, banked holidays do not automatically count toward your statutory 28-day minimum unless your contract says they do. Check your contract or ask your HR department. Some employers count them; others keep them separate. Either way, you should receive payment or time off for them.

Can I carry over a banked holiday into the next year?

This depends on your employer's policy and your contract. Some employers allow banked holidays to roll over; others require you to take them within a set period. If your contract does not say, ask your HR department. If your employer refuses to let you carry over a banked holiday and you cannot take it before the important date, you should be paid for it instead.

How do I know if a day I worked should have been banked instead?

If you worked on a public holiday and your employer did not give you a day off in return or pay you extra, ask your manager or HR department in writing whether that day should have been banked. Provide the date and the public holiday name. If your employer says no, ask them to explain why in writing. Keep this record. If you believe you are owed a banked holiday, you can raise a formal complaint or contact your employment tribunal.