In Denmark, all employees are entitled to paid vacation, and the Holiday Act (Ferieloven) governs how vacation is earned and how holiday pay is handled.
Holiday pay is the financial compensation employees receive for taking time off, and it's important to understand how it works and how paid vs. unpaid vacation differs.

Vacation is earned continuously during the vacation year, which runs from September 1 to August 31 the following year.
For example, vacation earned between September 1, 2023 and August 31, 2024 can be used until December 31, 2025.

Employees earn 2.08 vacation days per month of employment, totaling 25 days (5 weeks) per vacation year.

Part-time employees also earn 25 vacation days per year, regardless of how many days or hours they work per week.
However, one week of vacation is always counted as five days, even if the employee normally works fewer days.
This means regular days off are included in the vacation count.

See how you can automatically adjust the value of vacation for part-time employees here.

Paid Vacation (Ferie med løn)

Employees on paid vacation continue to receive their regular salary during time off.
This is common for salaried employees. In addition, they are entitled to a holiday allowance of 1% of their vacation-eligible earnings, usually paid in May and August.

Read more about the holiday allowance here.

Unpaid Vacation (Ferie uden løn)

For hourly or non-salaried employees, 12.5% of their vacation-eligible earnings are set aside as holiday pay.
These funds are transferred to the employee’s Feriekonto monthly.
When taking time off, employees must request the funds themselves via borger.dk, and the money is only paid out once the vacation is actually taken.

Executive/Director’s Pay (Direktørløn)

If you choose to classify someone as receiving director’s pay, they do not accrue vacation. Directors are not covered by the Holiday Act if they’re not considered employees, and instead have their own contract with custom vacation terms.

By default, unused vacation expires in Salary at the end of the vacation usage period—for example: Vacation earned between September 2024 and August 2025 will expire on December 31, 2025.

However, under the Holiday Act, employees and employers may agree in writing to carry over unused vacation to the next vacation year. This can be activated company-wide by enabling automatic carryover as of January 1. See how to enable this setting here.

Yes. All employees, including part-time staff, earn 25 vacation days annually.
Even if they work fewer days per week, a vacation week still counts as five days, including their normal days off.

See how to automatically increase vacation value for employees who don’t work 5 days per week here.

If unused vacation from a previous year has neither been paid out nor carried over, you are required to report the days and their value to the Labour Market Holiday Fund. Salary does not submit this report automatically.

You must submit this via the virk.dk self-service platform.
Further guidance is available on the official Arbejdsmarkedets Feriefond website.

By default, unused vacation days in Salary expire at the end of the vacation usage period, for example:
Vacation earned between September 2024 and August 2025 will expire on December 31, 2025.

According to the Danish Holiday Act, employers and employees can enter a written agreement to carry over unused vacation to the next vacation year.
This can be applied company-wide by enabling automatic carryover of vacation days as of January 1.

Guide:

1. Go to the Company tab and click on Holiday Settings.

2. Enter the number of days employees are allowed to carry over automatically and click Save changes.

3. Once enabled, the carried-over days will appear on the January payslip. For the rest of the year, the days are added to the regular vacation balance (they will not appear in a separate column).

If you haven’t enabled automatic carryover, use a Vacation Balance Correction.

Guide:

1. Go to the employee's profile and click Balance adjustments.

2. Click Create absence balance adjustment.

3. Fill in the fields:

​Adjustment date: Keep the pre-filled date.

​Absence type: Choose Paid vacation day.

​Operation: Keep the default.

​Earned: Enter the number of days to be carried over.

​Include vacation day value:

This setting is disabled by default. If enabled, the transferred vacation days are assigned a value. This only applies in cases where an employee leaves the company, and compensation for unused vacation days needs to be paid out.

If the setting is disabled, the added days will not be paid out upon termination.

However, if it is enabled, the system will automatically suggest a value for the days, but it is also possible to manually enter a custom value. In that case, the value will be used when calculating and paying out the vacation days upon termination.

4. The carried-over days will appear on the next payslip.

With the new holiday law, it is possible to offer employees with paid holiday the option to take holiday in advance. This means that the employee can take holiday even if they have not yet accrued enough holiday days – without an immediate deduction from their salary.

The taken holiday is automatically offset in the following months as the employee earns holiday. Upon termination, any negative holiday balance will be deducted from the salary.

In Salary, you can set the system to automatically lend holiday to employees. Once this is set up, employees will only be deducted from their salary when they exceed the specified limit for borrowed holiday days.

Guide:

1. Go to the Company tab and click on Holiday Settings.

2. Find the setting Number of holiday days employees may borrow and specify the maximum number of holiday days that can be borrowed by employees.

3. Click Save.

Unsure about the setup? Check out our short video guide (DANISH ONLY) :

If you would like to use a different holiday fund than Feriekonto, you should start by enabling it under advanced settings here.

1. Then, go to the individual employee’s profile and click on the Vacation tab

2. Turn on the “Other vacation reporter” button. Select the relevant reporter from the drop-down menu.

3. Click Save Changes to finish.

By default, vacation is earned at a rate of 2.08 vacation days per month. This feature is relevant if there are employees who should earn vacation per hour or per day instead – for example, in project-based work.

If you choose to calculate per day, 0.07 vacation days are calculated per working day.

If you would like to use a different calculation, you should start by enabling it under advanced settings here.

1. Then, go to the individual employee’s profile and click on the Vacation tab.

2. Enable the Use other holiday calculation function. Then, select whether vacation should be calculated per hour or per day, and click Save.

Normally, you earn 12.5% in holiday pay when you take unpaid leave. If you have a collective agreement or an individual arrangement, you can choose to pay 12% or more.

If you'd like to use a different rate, you need to start by enabling it under advanced settings here.

1. Then go to the individual employee's profile and click on the Holiday tab.

2. Now you can edit the percentage in the Holiday Pay field and click Save Changes.

For part-time employment, the same holiday accrual applies (25 days per year), but the recording and calculation of holiday usage requires special attention to ensure accurate balances and salary. Salary offers both automatic calculation and the option for manual adjustment, depending on the company's needs.

If you're unable to select paid holiday, it's usually because your employee is hourly or commission-based. If this is the case, you need to enable the function under advanced settings here. After that, you will be able to select paid holiday.

Normally, the accounting for earned and taken holiday for hourly and commission-based employees is ignored when calculating the value of earned holiday. This can cause challenges if these employees have paid holiday. You can enable the Treat waged/commissioned employees holiday as salaried function under advanced settings here.

With this function, Salary will treat hourly and commission-based employees' holiday as salaried holiday. This means the system will automatically reduce the value of taken holiday in line with the holiday taken, ensuring a more accurate and reliable handling of holiday settlements.

If you have enabled paid holiday for hourly employees, you need to register when the holiday is taken under absence, so that the balance is updated. Additionally, you must manually add the hours the employee would normally have worked, as the system does not automatically add the amount.

If you are unable to select paid holiday for your hourly employee, you can read about how to enable this here.

Yes, if you're a Premium customer, you can set up Salary to add holiday to your Google or Outlook calendar. See this guide.

Employees with paid holiday receive their normal, fixed salary when they take time off. In addition to their salary, they are also entitled to a holiday allowance of 1% of the holiday-eligible salary. The holiday allowance is automatically paid out twice a year in Salary – in May and August – but it can also be paid out on an ongoing basis as the employee takes holiday.

The holiday allowance acts as compensation for the fact that salary during holiday is not exactly the same as holiday pay (12.5%). Therefore, the Holiday Act stipulates that employees with paid holiday must also receive a holiday allowance of 1%. In some collective agreements, the holiday allowance may be higher than the legal minimum.

The holiday allowance is automatically paid out twice a year in Salary – in May and August – but it can also be paid out on an ongoing basis as the employee takes holiday.

Additionally, the holiday allowance is paid out if an employee terminates their employment. The holiday allowance is paid for any holiday days already taken (that have not yet been paid out). This means that if the employee has not taken holiday during the entire holiday period, no holiday pay will be paid out either.

If you want to manually pay out the holiday allowance, you need to pay it as a regular bonus. See how to create a bonus here.

Then, you need to write down the holiday allowance balance by the amount that has been paid out.

1. Go to the Balance adjustments tab in the employee's profile.

2. Click on Create supplement adjustment.

3. Select Holiday Supplement as the type.

4. Choose Decrease, enter the amount that has been paid out, and click Save Changes.