What is a holiday allowance?
You earn a holiday allowance when you work, which amounts to 12.5 percent of your total salary. Therefore, a holiday allowance is an amount that you continuously earn when you work.
When you take a vacation, you get paid your accrued holiday allowance. It constitutes your salary during the period you take your vacation, and just like your salary, you also have to pay tax on the holiday allowance.
For salaried employees, there are different rules for the accrual of holiday allowance.
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Holiday allowance for salaried employees
If you are a salaried employee, you do not accrue a holiday allowance but receive pay during your vacation.
For every month you work, you accrue 2.08 vacation days. You are entitled to five weeks of paid vacation per year if you work full-time. Three of those five weeks are called primary vacation, which you have the right to take continuously.
The employer is obliged to pay holiday allowance
If you are an employer, you are obliged by the Vacation Law to pay holiday allowance to your employees. This applies regardless of how many employees you have and whether they are full-time or hourly.
As holiday allowance amounts to 12.5% of each employee’s salary, it corresponds to each employee accruing 2.08 vacation days every month they are employed by you.
Who is entitled to holiday allowance?
According to the Holiday Act, all employees are entitled to accrue holiday allowance if they are in a paid employment relationship with an employer.
But that means this requirement does not cover you if you are unemployed or self-employed.
Furthermore, your work must be within Denmark’s borders if you are to be entitled to holiday allowance, as there may be other applicable rules otherwise.
You have to apply for holiday allowance payout yourself
To receive your holiday allowance payout, you must apply for it by logging into borger.dk. There, you have to state why you want to receive the payout – for example, because you are taking a vacation or leaving the job market in Denmark.
Then, you have to choose when you want to take your vacation, where you decide whether it should be a whole or half day.
Once you have approved the application, your employer will be notified so that they can pay out your holiday allowance.
Do you want to learn more?
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With Acubiz, you can quickly register holidays, time off in lieu, sickness, or other absences and save time and resources. You can learn more about optimizing time registration in your company and do everything your Excel sheet cannot do.