"Unlimited annual leave" has become one of the most talked-about workplace benefits of the 2020s. Popularised by US tech companies like Netflix and LinkedIn, the concept has crossed the Atlantic and is now being adopted by a growing number of UK businesses. But does it genuinely work, or does it create more problems than it solves? Here is a grounded look at the reality for British employers.
An unlimited leave policy (sometimes called "unlimited PTO") removes the fixed annual leave allowance. Instead of receiving, say, 25 days plus bank holidays, employees can take as much time off as they need, subject to approval and meeting their work commitments.
In practice, "unlimited" rarely means "take six months off." Most companies pair it with expectations around deliverables, team coverage, and manager approval. The principle is simple: we trust you to get your work done and take the time off you need.
This is the part many employers miss. Under the Working Time Regulations 1998, all UK workers are entitled to a minimum of 5.6 weeks (28 days for full-time employees, including bank holidays) of paid annual leave per year.
You cannot contract out of this minimum. Even if your policy says "take as much as you like," you must still:
Legal warning:Under an unlimited leave policy, if an employee leaves the company, there is no accrued leave balance to pay out — which is one reason some businesses adopt the policy. However, UK tribunals could take a different view if the employee has not taken their statutory minimum. Always track the 28-day floor.
In competitive sectors like tech, finance, and creative services, unlimited leave is a headline benefit that attracts candidates. It signals a modern, trust-based culture.
No more tracking accruals, carry-over calculations, or year-end leave rushes. Employees simply take what they need.
Accrued but untaken leave is a financial liability. With unlimited leave, there is nothing to accrue — and nothing to pay out when someone leaves (beyond the statutory minimum).
Different employees need different amounts of time off. A parent may need more during school holidays. Someone undergoing medical treatment may need sporadic days. Unlimited leave accommodates this without awkward negotiations.
This is the most widely reported downside. Studies from organisations like CharlieHR and Namely found that employees on unlimited leave policies typically take fewer daysthan those with a fixed allowance. Without a clear entitlement, people feel uncertain about what is "acceptable" and default to taking less. This is the opposite of the intended outcome.
Approval depends on managers. A supportive manager may encourage generous time off; a less supportive one may subtly discourage it. This creates inconsistency across the business.
Part-time workersmay struggle to know what "unlimited" means relative to their hours. Junior employees may feel they have less social permission to take leave than senior colleagues.
If you are not tracking leave, how do you ensure everyone takes their statutory 28 days? An employment tribunal will not accept "we have unlimited leave" as a defence if an employee was effectively pressured into not taking time off.
When someone leaves, the question of leave during the notice period becomes complex. If there is no accrual, what is owed? Getting legal advice on your specific policy wording is essential.
If you decide to go ahead, these steps will help you avoid the common pitfalls:
| Step | What to do |
|---|---|
| 1. Set a minimum floor | Require everyone to take at least 28 days (or more). This solves the "people take less" problem and keeps you legally compliant. |
| 2. Lead from the top | If senior leaders do not take leave, no one else will. Make leadership leave visible. |
| 3. Train managers | Ensure managers actively encourage leave and approve requests consistently across teams. |
| 4. Track everything | Unlimited does not mean untracked. You still need to monitor who is off and when for coverage, compliance, and wellbeing. |
| 5. Review quarterly | Check average days taken by team, role, and seniority. If some groups are taking significantly less, investigate why. |
| 6. Define boundaries | Clarify maximum consecutive days, peak-period rules, and approval process. "Unlimited" needs guardrails. |
Several UK businesses have publicly shared their experiences with unlimited leave. The results are mixed:
Unlimited leave works best in high-trust, output-focused environments where employees have clear goals and autonomy. It tends to struggle in:
If you are not ready for fully unlimited leave, consider a generous fixed allowanceinstead — say 30–35 days plus bank holidays. It provides many of the same benefits (attraction, flexibility) without the compliance and behavioural risks.
Whether you adopt unlimited leave or stick with a generous fixed allowance, LeaveManager keeps you in control: