Holiday Pay in Denmark – Calculation, Reporting & Payment Guide

In many places, holiday pay is based on what the employee normally earns over a certain time. It is a common benefit that helps people take time off, relax and still have money coming in. This supports a good balance between work and personal life.

Holiday Pay Denmark

Holiday pay is money your employees earn as they work, giving them the right to paid time off. This is a legal requirement, and it applies to most employees working under a Danish employment contract.

In Denmark, all employees are entitled to five weeks (25 working days) of paid vacation per year. This right is protected under the Danish Holiday Act (Ferieloven). Employees accrue 2.08 vacation days per month, which adds up to 25 days over a year.

Holiday pay, known in Danish as "feriepenge", ensures that workers receive income during their vacation periods. It is not just a benefit—it is a legal requirement.

Calculation of Holiday Money

In Denmark, employees earn the right to paid holiday through their work. All employees, regardless of whether they work full-time, part-time, or on a casual basis they still earn holiday leave.

Employees usually earn 2.08 days of holiday each month. They continue to earn holidays during weekends, public holidays, sick days, time off, or while already on holiday.

Holiday pay in denmark calculator:-

If someone works for less than a month, they earn 0.07 days of holiday for each day they work.

Paid holidays are calculated differently based on how employees are paid—whether they are salaried or paid hourly.

Employees paid by the hour

Hourly paid employees in Denmark earn 12.5% of their wages as holiday pay, instead of paid vacation. This amount includes bonuses and is paid into FerieKonto. Employers must deduct AM contributions and A-tax before reporting. Employees can use this amount as income during their holidays, even without regular pay.

Employees paid on a monthly basis

Salaried employees in Denmark, paid monthly, typically receive full salary during holidays. Instead of separate holiday pay, their holiday entitlement is included in their monthly wage. They accrue 2.08 paid vacation days per month. Employers still contribute to FerieKonto if required, and normal taxes and AM contributions apply during leave.

Reporting and Payment of Holiday Pay Denmark

Holiday pay must be reported through SKAT’s E-income register. This platform allows employers to both submit and correct information related to payments in lieu of untaken holidays. However, there are some limitations.

If the payment has already been made to the employee, you cannot change or reduce the reported amount. In cases where payment has been processed via Feriepengeinfo, you may only report additional amounts—reductions are not allowed once the payment is completed.

For companies with a collective agreement that includes a holiday pay guarantee and that pays holiday pay directly to employees, pre-tax holiday pay must be reported.

If your company uses an external holiday fund to manage payments, you must report the holiday pay after tax.

Making accurate and timely reports via E-income ensures you comply with the Danish Holiday Act and that your employees receive their holiday pay correctly and without delays.

Interest and Repayment of Holiday Money Denmark

Timely reporting and payment of holiday pay are essential under Danish law. If you fail to report or pay holiday pay on time, interest of 1.5% per commenced month will be added from the due date until payment is made. Your employee will also be notified of the missing or delayed payment at the same time, which can affect trust and lead to administrative consequences.

Accrual of Bonus

Employees may also earn bonuses, and these must be reported and paid within the regular deadlines. You can report bonus related holiday pay using code FK1 in field 68 in the eIndkomst system (SKAT). This specific code allows you to report the bonus without triggering interest charges, provided it is done within the allowed timeframe.

Repayment of Overpaid Holiday Pay

If your company has accidentally paid too much into FerieKonto, you can request a refund. For payments to a NemKonto, you need to call FerieKonto directly. If the refund must go to a specific or international bank account, you must send your full bank details to FerieKonto. Always ensure accurate reporting to avoid delays, interest, or the need for repayment processing.

Holiday Allowance

Holiday allowance is an optional benefit some employers offer, usually as a fixed amount, to support employees during time off or as recognition for working on public holidays. It’s not legally required in many regions but may be part of company policy and included in payroll. Unlike overtime pay which compensates for extra hours on regular workdays holiday allowance specifically applies to work done on official holidays. It serves as an added incentive or reward for employees working during such periods.

Transfer of Holiday Pay Denmark

Employees in Denmark earn holiday during the holiday year (1 September to 31 August) and can take it during the holiday-taking period, which lasts from 1 September to 31 December the following year. If not used, holidays can be transferred to the next period.

Holidays exceeding four weeks can be transferred if both employer and employee agree in writing before 31 December. Some collective agreements may limit this. The employee must be actively employed when the agreement is signed.

If an employee couldn’t take up to four weeks of holiday due to valid reasons such as illness or parental leave those days can also be transferred. These cases must be reported by 31 January through the self-service portal.

If the employee has left the job, they must report the transfer themselves via borger.dk to Feriekonto/Feriepengeinfo. Valid reasons are listed under Danish legislation.

Conclusion

Understanding and managing holiday pay is essential for all employers in Denmark. Whether your employees are salaried or hourly-paid, you are responsible for calculating, reporting and paying holiday pay accurately and on time. Using tools like SKAT’s E-income system or payroll service agencies can help ensure compliance. However, the final responsibility remains with you. Following the correct process not only meets legal requirements but also supports employee trust and well-being by ensuring they receive their rightful holiday entitlements.

FAQs Holiday Pay in Denmark