Annual leave entitlement in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Employees in Ireland are entitled to 4 working weeks of paid annual leave per year under the Organisation of Working Time Act 1997. How that works in practice depends on how many hours the employee works and when their leave year runs.
How entitlement is calculated
There are three ways to calculate annual leave, and an employee is entitled to whichever gives the greater result:
- 4 working weeks in a leave year in which the employee works at least 1,365 hours
- One-third of a working week for each month in which the employee works at least 117 hours
- 8% of hours worked in a leave year, up to a maximum of 4 working weeks
Most full-time employees on standard hours will simply qualify for 4 weeks under the first method. The percentage method is particularly useful for part-time and casual workers, because it scales leave entitlement in proportion to time worked.
The leave year runs from 1 April to 31 March unless the employer and employee agree otherwise in writing.
What counts as "working time" for leave purposes
Annual leave accrues during periods of actual work. However, the legislation also provides that employees continue to accrue leave while on certain protected absences, including:
- Maternity leave
- Adoptive leave
- Paternity leave
- Parental leave
- Sick leave, subject to certain conditions
This means an employee who is out on maternity leave for six months does not return to find half their leave entitlement has evaporated.
Pay during annual leave
Employees must receive their normal weekly pay for each week of annual leave taken. Where pay varies — for example, because it includes regular overtime or commission — the calculation uses the average pay over the 13 weeks preceding the leave. The key point is that annual leave pay should reflect what the employee would ordinarily earn, not just their basic rate.
Employers cannot substitute a payment in lieu of annual leave except on termination of employment. During employment, the leave must actually be taken.
When leave is taken
The employer has the right to determine when annual leave is taken, but must consider the employee's opportunities for rest and recreation and consult with the employee or their trade union at least one month before the leave is to begin.
In practice, most employers build a system of mutual agreement rather than dictating dates — it reduces friction and tends to produce better outcomes for everyone. Shutting down over Christmas or bank holidays and designating those as annual leave days is permitted, as long as the employee's total entitlement is still met on top of, or inclusive of, those days depending on how the policy is structured.
Public holidays are separate from annual leave entitlement and carry their own rules under the same Act.
Carrying over leave and what happens at termination
Employees should take their leave within the leave year it accrues. If an employee could not take leave due to illness, they may carry it over for up to 15 months after the leave year ends — a position clarified by European Court of Justice case law and reflected in Irish practice.
Outside of illness, carry-over is at the employer's discretion. It is worth having a written policy that states clearly how much, if any, leave can be carried into the next year, and whether untaken leave is paid out or forfeited.
On termination — whether resignation, redundancy or dismissal — employees are entitled to pay in lieu of any outstanding annual leave they have accrued but not taken. This is a statutory entitlement and cannot be waived by contract.
Keeping records
Employers are legally required to keep records of annual leave and public holiday entitlements and the leave actually taken by each employee. These records must be retained for three years. Failure to maintain adequate records is an offence and weakens any employer's position in a Workplace Relations Commission (WRC) dispute.
A straightforward system — whether a spreadsheet or dedicated HR software — that logs each employee's leave balance, requests, approvals and carry-over status will cover the requirement and prevent the kind of ambiguity that leads to complaints. If you run payroll through a platform like Mellow, leave data and pay calculations can sit in the same place, which removes the risk of the two falling out of sync at payment time.
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