Remember to pay out holiday supplement in May and August if not paid continuously when a holiday is taken.
According to §18 in the Danish Holiday Act, the holiday supplement is paid either continuously when the holiday is taken, or it is paid twice a year, in May and August respectively. The holiday supplement must be calculated as holiday supplement, cf. Section 18, subsection of the Danish Holiday Act. 1, 1st.
What is holiday supplement?
In May the holiday supplement is paid out. The holiday supplement is equal to 1% of the holiday eligible salary for the first half of the current holiday year (September 1st – May 31st). Likewise, when in August the 1% of the holiday eligible salary for the second half of the holiday year is paid out. (June 1st – August 31st).
Why a holiday supplement of (at least) 1%
As the value of holiday with pay does not cover vacation pay entirely, the holiday supplement functions as a compensation for wage and salary earners. The rate of 1% is stated by the Danish Holiday Act. However, some employees might be entitled to a larger holiday supplement for various reasons. E.g., the Employee is covered by a collective agreement.
Employer can pay out holiday supplement when the employee uses vacation.
The holiday supplement is calculated of the holiday eligible salary prior to the employee's vacation, same way as with vacation pay. Current month does not apply to the calculation as the vacation is earned at the end of the month.
Pay-out of holiday supplement when an employee resigns.
When the employer pays holiday supplement twice a year confer §18 of the Danish Holiday Act, the resigned employee is entitled to a pay-out of holiday supplement for the, at the resignation time, used vacation. Provided there hasn’t yet been paid out holiday supplement for those days.
Example:
An employee uses 5 vacation days in the fall and resigns January 31st. Usually the holiday supplement is paid out in May (and August). At the resignation time the employee is entitled to holiday supplement for the 5 used vacation days. The holiday supplement is then paid out alongside settlement of vacation pay with the last salary.
Formulas:
Earned Holiday Supplement / Earned Vacation days = Daily Holiday Supplement Daily Holiday Supplement * Used Vacation Days = Holiday Supplement to pay out at resignation
Comments