Annual leave

What it means

The basic entitlement is four weeks a year, five for employees over 33 or with ongoing care of a child. It accrues once the employee has worked the required time for the employer.

Leave is paid as wage compensation based on average earnings, not on base pay. With variable premiums that makes leave dearer than expected.

Not every day off is leave. A doctor’s appointment, caring for a family member or one’s own wedding are obstacles to work and are not deducted from the leave entitlement, while maternity and parental leave are, despite the name, an entirely different institution.

How it works in practice

The employer schedules leave in a leave plan, taking the employee’s wishes into account. Unused days carry over, and at the closing date the company books them as a provision including contributions.

Only leave that could not be taken before employment ended may be paid out. Paying instead of granting leave otherwise is not allowed and is a standard inspection finding.

An employee who joins or leaves during the year gets a proportional share of leave, one twelfth for each full month of employment. At every change we recalculate the entitlement in the payroll system and keep the payroll record showing how many days have been taken and how many remain.

What to watch out for

A balance built up over two or three years is a hidden liability. When several people leave at once or the company is sold, it turns into cash immediately, although nobody had it in the reports.

In shift work with unevenly scheduled working time, leave is taken by shifts, not calendar days. If the software deducts it as for an ordinary five-day week, staff end up with more or less time off than they are owed, and the difference is settled retrospectively.