Can employees use holidays as sick days?

Annual leave and sickness absence are governed by different rules, but in practice they overlap constantly. An employee falls ill on the first day of a booked holiday. Someone on long-term sick leave asks to take annual leave because their sick pay has run out. A manager wonders whether they can ask an employee to use a holiday day instead of going off sick.

This guide answers those questions from an employer's perspective, covering what the law requires, what is at your discretion, and what changed when the new Statutory Sick Pay rules came into force in April 2026.

Do sick days count as holidays?

No. Sick leave and annual leave are separate types of leave with separate rules, and one does not automatically count as the other.

An employee can ask to take a day of annual leave rather than report sick, and it is at your discretion whether to approve it. Employees can self-certify sickness for up to seven calendar days, including weekends and bank holidays, without needing any medical evidence. A fit note is only required when someone is off for more than seven days in a row.

It is worth knowing that fit notes are no longer a GP-only document. As well as GPs and hospital doctors, they can now be issued by registered nurses, occupational therapists, pharmacists and physiotherapists, and they can be digital or printed. There are sensible reasons an employee might prefer to use holiday. They may have no company sick pay, may have used their sick leave allowance, or may want to avoid a period of reduced pay. Where that is the case, approving it is usually the right call.

What you cannot do is insist on it. Acas is explicit that an employer cannot force a worker to take holiday while they are off sick.

Do you still get holiday pay when off sick?

An employee cannot receive holiday pay and sick pay for the same period. It has to be one or the other.

They can, however, request paid annual leave while signed off sick, and if you approve it, holiday pay replaces sick pay for those days. For someone on Statutory Sick Pay alone, that can be a significant difference in income. Most employees are entitled to one or both of two types of sick pay.

Statutory Sick Pay (SSP)

SSP is the legal minimum, and the rules changed substantially on 6 April 2026 under the Employment Rights Act 2025. Any policy written before that date will be out of date.

Three things to know:

• The rate. For the 2026/27 tax year, SSP is £123.25 a week or 80% of the employee's average weekly earnings, whichever is lower, payable for up to 28 weeks.
• It starts on day one. Section 10 of the Employment Rights Act 2025 removed the three waiting days. SSP is now payable from the first qualifying day of sickness rather than the fourth.
• The lower earnings limit has gone. Section 11 of the same Act removed it, so employees who previously earned too little to qualify for SSP now receive it. For those employees, the 80% calculation is what applies.

The Department for Business and Trade confirmed both changes took effect on 6 April 2026. For employers with part-time or lower-paid staff, this is the change most likely to affect your payroll and your absence costs.

Contractual sick pay

Contractual, or occupational, sick pay tops up SSP and is not a legal requirement. You can set your own terms, including a qualifying period of service, how long full pay continues and at what point it steps down to half pay or to SSP alone. Whatever you decide, write it down and apply it consistently. Inconsistent application of discretionary sick pay is a common source of grievances and, where a disability is involved, of discrimination claims.

Claiming back annual leave if sick: is this allowed?

Yes. If an employee falls ill during booked annual leave, they can reclassify those days as sick leave from the point they report it, and take the holiday another time.

Acas confirms the worker must report the sickness to you if they want the time treated as sick leave, and that they keep the time to use as holiday later. Government guidance says the same: if an employee is ill just before or during their holiday, they can take it as sick leave instead.

The normal evidence rules apply. For seven days or fewer, self-certification is enough. A fit note is only needed beyond that. Your absence policy should set out how someone reports sickness while they are away, because the usual process of calling their line manager before 9am may not be practical from abroad.

How much sick leave are employees allowed per year?

There is no legal maximum. You can set your own thresholds for when absence triggers a conversation, as long as you apply them fairly.

Two benchmarks are worth knowing, and they look contradictory until you understand what each measures.

CIPD puts average absence at 9.4 days per employee per year, the highest in more than 15 years, up from 7.8 days in 2023. That figure comes from surveying employers about absence among their own staff.

Office for National Statistics data gives a sickness absence rate of 2.0% for 2025, with 148.8 million working days lost and an average of 4.4 days per worker. That is measured across the whole labour force through the Labour Force Survey, which is why it is lower.

It may be a good idea to use CIPD as your benchmark if you are comparing against other employers, and ONS if you want the national picture. The ONS data also shows what people are off for: minor illnesses account for 30.4% of absence occurrences, musculoskeletal problems 14.6% and mental health conditions 8.9%.

Be careful about applying any threshold rigidly though. Where absence is related to a disability, counting it towards a standard trigger point can amount to discrimination arising from disability. Acas suggests adjusting trigger points, or not counting some or all disability-related absence towards them.

Taking annual leave during sick leave

An employee on sick leave can request annual leave, and there are several reasons they might. They may be well enough for a holiday but not for work. A change of scene may genuinely aid recovery, particularly with a mental health condition. Or their sick pay may have reduced and they need the income.

The request has to come from them. If you approve it, holiday pay replaces sick pay for that period and sick leave resumes afterwards if they are still unable to work. There is no requirement to approve every request, but think carefully before refusing one. If someone has been off for months on SSP alone, a refusal to let them use leave they have already accrued is difficult to justify and unlikely to help their recovery.

Do employees still accrue holidays whilst off sick?

Yes, and this one is often misunderstood. Statutory holiday entitlement continues to build up while an employee is off sick, however long they are off.

Carry-over is not simply at your discretion. Where someone could not take their leave because of long-term sickness, Acas confirms they can carry over a maximum of four weeks, and must use it within 18 months from the end of the leave year in which it accrued. Government guidance expresses the same rule as up to 20 days for a worker with regular hours, or up to 28 days for irregular hours and part-year workers.

Keeping records One obligation that often gets missed. Since 6 April 2026, section 35 of the Employment Rights Act 2025 requires employers to keep records adequate to show compliance with annual leave entitlements, and to retain them for six years.

So if your holiday records currently live in a spreadsheet that gets overwritten each year, that needs revisiting.

How an Employee Assistance Programme can help with sick days and accrued holiday

Most of the difficulty with holiday and sickness overlap comes down to timing. The longer someone is off, the more complicated the entitlement questions become, and the less likely they are to return at all.

That is where our Employee Assistance Programme comes in. Day one intervention means someone makes contact on the first reported day of absence rather than weeks later, which is consistently the single biggest factor in how long an absence lasts. For the employee, it means support arrives while the problem is still manageable. For you, it means fewer short absences turning into the long-term cases where carry-over, phased returns and capability questions start to pile up.

Wisdom Super Care adds a Virtual GP line, which matters more than it might sound when NHS waiting times may be the reason someone is still signed off. Being able to get an appointment and, where appropriate, a prescription without waiting weeks can shorten an absence considerably.

For the questions in this article, our HR and management advice line gives your managers somewhere to check before they act rather than after. Whether a trigger point should apply to disability-related absence, or whether a long-term sickness case needs an occupational health assessment, these are decisions that are far cheaper to get right first time.

Conclusion

Sick leave exists for illness, injury and poor mental health. Annual leave exists for rest. Most of the time the right answer is to keep them separate, because an employee who spends their holiday entitlement being unwell has not had a holiday.

That said, there are good reasons an employee might want to use leave during a period of sickness, and the law gives them that choice. Your job is to make the options clear, approve reasonable requests, keep accurate records, and resist the temptation to apply absence triggers rigidly where a disability may be involved.

If there is one thing to take away, it is the April 2026 SSP change. Day-one payment and the removal of the lower earnings limit affect every employer with lower-paid or part-time staff, and any policy written before that date needs updating.

Frequently asked questions

Can employees use annual leave as sick leave?

They can request it, and it is at the employer's discretion to approve. An employer cannot require someone to take annual leave instead of sick leave.

Can employees claim back annual leave if they become sick on holiday?

Yes. If they fall ill during booked leave and report it, those days can be treated as sick leave and the holiday retaken later. Self-certification covers the first seven days; a fit note is needed beyond that.

Do employees still accrue holiday while off sick?

Yes, however long they are off. Where sickness prevented them taking leave, they can carry over up to four weeks and must use it within 18 months of the end of that leave year.

Can employees take annual leave during a period of sickness absence?

Yes, if they request it. Holiday pay replaces sick pay for those days and sick leave resumes afterwards if they are still unfit for work.

How much is Statutory Sick Pay in 2026/27?

£123.25 a week, or 80% of the employee's average weekly earnings if that is lower, for up to 28 weeks. Since 6 April 2026 it is payable from day one and there is no lower earnings limit.

How should employers manage sickness and holiday overlap?

Set out the rules in writing, make clear how to report sickness during leave, keep accurate records for six years, and review any absence trigger points to make sure they flex where disability-related absence is involved.

Related Entities

Statutory Sick Pay (SSP)

The legal minimum sick pay employers must provide. Payable from the first qualifying day of sickness under the Employment Rights Act 2025, up to 28 weeks.

Contractual Sick Pay

An enhanced sick pay scheme offered at the employer’s discretion. Terms must be clearly outlined in employment contracts, including eligibility and qualifying service.

Annual Leave Entitlement

The statutory 5.6 weeks’ paid holiday employees accrue each year, including during periods of sickness absence.

Fit Notes

Medical evidence required when an employee is off sick for more than seven calendar days. Needed to reclaim annual leave lost to sickness.

ACAS Guidance

Advisory rules on managing sickness absence, holiday accrual, and carry‑over rights, helping employers apply fair and consistent practices.

Long‑Term Sickness Absence

Absences lasting four weeks or more. Employees continue to accrue holiday and may request to take annual leave during this period.

Employee Assistance Programme (EAP)

A support service offering early intervention, mental health support, and practical guidance to help employees return to work sooner.

Virtual GP Services

Remote medical consultations that help employees access treatment quickly, reducing avoidable sickness absence and supporting wellbeing.