Get to grips with the most important holiday terms
There are many terms, dates and rules to keep track of when you work with holiday administration. Here's an overview of some of the most important holiday terms.
1 Who earns holiday?
All employees earn holiday and are covered by the Holiday Act. Self-employed people, consultants and freelancers are, as a rule, not covered by the Holiday Act. We divide employees into two groups: Salaried employees and hourly paid employees.
Salaried employee: A salaried employee earns 2.08 days of paid holiday a month – 25 days a year in total. 12.5% is set aside in holiday pay, which is settled when the employee leaves. On top of this, a holiday allowance of 1% of the holiday-entitled pay is earned.
Hourly paid: An hourly paid employee earns 2.08 days of holiday a month. On top of this, the employee earns holiday pay, which is 12.5% of the holiday-entitled pay.
2 Accrual period
Holiday is earned between 1 September – 31 August. Since the new Holiday Act came into force in 2020, we have what we call concurrent holiday. This means that the holiday the employee has earned can be taken after the first month of employment.
3 Holiday-taking period
The holiday-taking period for the holiday earned runs from 1 September in one year to 31 December the following year. That gives a period of 16 months in which holiday can be taken.
4 The 5th holiday week
Under the Danish Holiday Act, salaried employees save up 25 days of holiday a year. Under the EU Holiday Directive, an employee must take 4 weeks of holiday a year. That's why the first 20 days of holiday are called ‘directive-protected holiday’.
If the employee has earned more than 20 days of holiday but doesn't manage to take all the days, the days earned beyond the 20 days must be paid out.
An agreement can be made with the individual employee to transfer them to the next holiday year. Note that this only applies to days earned beyond the first 20 days, and that a maximum of 5 days can be transferred.
5 Payout and transfer of the 5th holiday week
Payout: As a rule, the 5th holiday week must be paid out. The payout must be made in March at the latest, in the year after the holiday accrual period ended.
Transfer: If the employee doesn't manage to take all 25 days of holiday, the company and the employee can agree that up to 5 days of holiday are transferred to the next holiday year. Note that only days beyond the first 20 days of holiday can be transferred. The agreement on the transfer must be made with the individual employee by 31 December at the latest, before the holiday-taking period ends.
6 Lost holiday
If an employee hasn't taken the directive-protected holiday, these days will be lost. For example, if an employee has saved up 25 days of holiday but only taken 19 days, the one day up to the 20 days will be lost and so can't be paid out or transferred. The company must still bear the cost, so the day must be reported to Arbejdsmarkedets Feriefond and paid in later.
7 Prevented from taking holiday
If the employee has been prevented from taking holiday, the holiday can be transferred at the end of the holiday year.
Examples of accepted reasons for being prevented from taking holiday:
- Parental leave
- Imprisonment
- Military service
8 Holiday allowance
Salaried employees earn a holiday allowance calculated as 1% of the holiday-entitled pay. As a rule, the holiday allowance is paid out twice a year – in May and August. The holiday allowance can also be paid out when the employee takes holiday. In this case, you calculate the holiday allowance earned and pay out the share that corresponds to the employee's planned holiday.
