Get to grips with the holiday allowance:
What is holiday allowance?
Holiday allowance was originally introduced to even out the difference between salaried employees who are paid during their holiday and hourly employees, who get 12.5% in holiday pay. The holiday allowance should therefore be seen as a kind of extra benefit for employees who are paid during their holiday. The holiday allowance is calculated as at least 1% of the employee's holiday-entitled pay. The 1% is set in the Danish Holiday Act, so the holiday allowance can never be less than 1%.
In some cases, employees can be entitled to more than 1% in holiday allowance. This can be through the collective agreement or an individual agreement.
Who receives holiday allowance?
All employees entitled to pay during their holiday are entitled to be paid a holiday allowance.
Employees entitled to pay during their holiday also accrue 12.5% in holiday pay, which is only paid out, in proportion to any remaining holiday, when the employee leaves.
When must holiday allowance be paid?
There are 2 ways to pay holiday allowance:
1. Holiday allowance can be paid at fixed times twice a year: in May and August.
In May, the holiday allowance for the period 1 September – 31 May is paid. In August, the holiday allowance for the period 1 June – 31 August is paid.
2. The holiday allowance can also be paid when the employee takes holiday. In this case, you calculate the accrued holiday allowance and pay the share that corresponds to the employee's planned holiday.
What happens to the holiday allowance if an employee leaves:
If you pay holiday allowance when the employee takes holiday, the holiday allowance the employee is entitled to will already have been paid, and no further holiday allowance is paid when they leave.
If you pay holiday allowance twice a year, you need to pay particular attention when an employee leaves. If the employee leaves before the holiday allowance has been paid in full, holiday allowance is settled for the days of holiday the employee has taken since you last paid holiday allowance.
Example:
An employee leaves and has taken 5 of 8 accrued days of holiday. Here, the company must pay holiday allowance for the 5 days the employee has already taken. No holiday allowance is settled for the 3 accrued days, as these are settled with 12.5% holiday pay when the employee leaves.
Holiday allowance in Zenegy:
By default, Zenegy uses the option of paying holiday allowance twice a year, that is, in May and August.
You can also choose to pay holiday allowance when the holiday is taken, by turning on the function ‘Enable ongoing payment of holiday allowance when taking a holiday’, after which the system calculates and pays the holiday allowance automatically.
Keeping track of the holiday allowance doesn't get any easier than that!
