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Holiday Pay in Denmark: Guide for Employers

Holiday pay in Denmark creates payroll, reporting and bookkeeping obligations. Foreign employers should set it up correctly before the first Danish payroll run.

Last updated: July 2026

Many foreign employers assume that holiday pay in Denmark works like a normal paid leave benefit. An employee takes time off, the employer continues the salary, and the payroll otherwise stays unchanged.

In Denmark, that assumption can create payroll errors.

What foreign employers need to know first

Holiday pay in Denmark belongs inside a structured payroll and reporting system. It affects how employees earn holiday, how employers pay holiday, how unused holiday continues after resignation, what employees see on payslips, and what the company reports through payroll.

For Danish founders, this may feel familiar. For international founders and foreign-owned companies, the system often feels surprisingly technical. A company cannot simply agree internally that an employee has paid vacation. The payroll setup must match the Danish holiday category.

This article explains the main principles in practical terms.

Why holiday pay matters for employers in Denmark

Holiday pay creates more than an employee-relations issue. It also creates a payroll compliance issue.

A wrong setup can lead to incorrect holiday balances, employee complaints, missing FerieKonto amounts, wrong payslip information, bookkeeping mismatches and problems when an employee resigns. The issue usually appears during summer, at year-end, or when someone leaves the company.

The risk often increases when a company hires its first Danish employee. Many founders understand salary, A-tax and AM-bidrag, but holiday pay adds another layer. Payroll systems can calculate most of it automatically when the employer chooses the correct employee setup from the beginning.

In practice, the company must know which holiday model applies before the first payroll run.

The basic Danish holiday logic

Employees in Denmark generally earn holiday while they work. Denmark uses concurrent holiday, which means that employees can normally take holiday as they earn it.

Holiday days and holiday year

The standard earning rate is 2,08 holiday days per month. Over a full holiday year, this gives the employee 25 holiday days, or five weeks. The holiday year runs from 1 September to 31 August. The holiday-taking period runs from 1 September to 31 December the following year, so employees have more time to use the holiday they earned.

This timing matters for employers. Payroll balances do not follow the calendar year in a simple way. A company that only checks holiday balances in January may miss the logic of the Danish holiday year.

Summer holiday planning

Summer also creates practical pressure. Employees have a right to three consecutive weeks of main holiday in the period from 1 May to 30 September, unless the parties agree on another arrangement. This is why Danish companies often handle holiday planning, payroll adjustments and employee questions before summer.

Salary during holiday or holiday allowance

Danish payroll distinguishes between holiday with salary, called ferie med løn, and holiday with holiday allowance, often called feriepenge.

Monthly paid employees

Monthly paid employees often have holiday with salary. They receive their normal fixed salary when they take holiday, if they meet the relevant conditions. In addition, they normally receive a holiday supplement, called ferietillæg. The standard supplement equals 1 % of pay for the holiday year, although collective agreements or employment terms can change the exact treatment.

Hourly paid employees

Hourly paid employees normally earn holiday allowance instead. Employers typically calculate this allowance as 12,5 % of salary before AM-bidrag and A-tax. When the employee takes holiday, the employee receives holiday allowance instead of ordinary salary for those holiday days.

This distinction creates one of the most common mistakes in Danish payroll. Some employers treat hourly paid employees as if they simply receive normal paid vacation. Others forget the holiday supplement for monthly paid employees. Both errors can affect payroll, employee balances and reporting.

Hourly paid employees and holiday allowance

For hourly paid employees, holiday allowance usually provides the relevant model.

The employee earns 2,08 holiday days per month, but payroll does not treat the payment like ordinary monthly salary during holiday. The employer must calculate and report holiday allowance correctly through payroll. Employees can normally view and claim their holiday allowance digitally through the public self-service solutions connected to FerieKonto or the relevant holiday administrator.

The payroll setup must show the basis

From an employer perspective, holiday allowance must remain visible and traceable. It should not sit as an informal spreadsheet balance outside the payroll system. The payroll setup should show which salary types generate holiday allowance and which salary types do not.

For example, normal hourly wages, fixed allowances and overtime pay may form part of the holiday allowance basis. Other payments, such as reimbursements of work-related costs, holiday allowance itself, salary during holiday and holiday supplement, follow a different treatment.

This is where payroll details matter. A small mistake in salary type setup can repeat every month and create a larger balance problem by the time summer arrives.

Monthly paid employees and holiday supplement

Monthly paid employees often receive normal salary while they are on holiday. This is the model many foreign employers expect.

However, the Danish system still requires attention. The employee usually earns holiday days continuously and receives a holiday supplement. The standard supplement equals 1 % of the relevant pay in the holiday year. The employer can pay it with salary in May and August, or when the employee begins holiday.

The practical question is therefore not only whether the employee gets salary during holiday. The employer also needs to know how the payroll system calculates the holiday supplement, when payroll pays it and how the payslip shows it.

Danish payroll systems normally handle this through salary codes and employee setup. The system calculates correctly when the employment type, salary type and holiday setup match the contract.

FerieKonto, Feriepengeinfo and what employees can see

Foreign employers often find the Danish holiday infrastructure confusing because several names appear in the process.

FerieKonto administers holiday allowance for employees who do not use another approved holiday arrangement. Feriepengeinfo works as the digital information layer for holiday data. Employees can usually view and claim holiday allowance through public self-service solutions.

Employers should not treat these systems as optional side platforms. They help make holiday pay visible to the employee.

Employee questions often start online

For example, an hourly paid employee may expect to see earned holiday allowance digitally after payroll. If the amount does not appear, the employee will often contact the employer. Timing, the payroll period, the payroll system setup or a reporting issue may explain the difference.

This is why employers should review holiday pay every month, not only during annual corrections.

What happens when an employee resigns

Employee resignation creates one of the most important control points for holiday pay.

When employment ends, the employer must review earned and unused holiday. The correct treatment depends on whether the employee had holiday with salary or holiday with holiday allowance, and whether transferred days or special circumstances exist.

For employees with holiday with salary, the employer will often need to convert unused holiday into holiday allowance and settle or report it under the Danish rules. For employees who already earn holiday allowance, the employer must check that the amounts and days match the payroll records.

Employers can easily miss this point when they focus only on the final salary. A final payslip may look correct from a salary perspective while the holiday pay still remains unfinished.

A clean offboarding process should therefore include a holiday balance review. The company should check earned days, used days, transferred holiday, holiday supplement, remaining allowance and the relevant reporting route.

Common mistakes foreign employers make

Several mistakes appear repeatedly in Danish payroll work.

  • Copying a foreign employment model into Denmark. Danish holiday rules follow Danish law and payroll practice.
  • Mixing hourly and monthly employee logic without checking contracts and work patterns.
  • Ignoring holiday balances until summer, when accumulated payroll errors are harder to correct.
  • Treating FerieKonto as something separate from bookkeeping, even though holiday pay can affect payroll liabilities and employee-related bookkeeping.
  • Forgetting resignation handling, including unused holiday, transferred holiday and holiday supplement.
  • Applying ordinary employee holiday rules to founders, managing directors or sole owners without reviewing their actual legal role.

A practical summer payroll checklist

Before the summer holiday period, employers should review the following points.

  • Have all employees received the correct holiday model? Compare the payroll setup with the employment contract.
  • Do hourly paid employees earn holiday allowance correctly? Review the salary types used for hourly wages, overtime, allowances and benefits.
  • Has payroll handled the holiday supplement for monthly paid employees? Confirm whether payroll pays the supplement in May and August or when holiday begins.
  • Do employee holiday balances look reasonable? Compare earned days, used days and remaining days before holiday starts.
  • Have you processed resignations fully? Review final salary, unused holiday, transferred holiday and holiday supplement before closing the payroll case.
  • Does bookkeeping match payroll? Holiday pay liabilities should also reflect the company’s real employee-related obligations.
  • Can employees see what they expect to see? Be ready to explain whether missing holiday allowance comes from timing, payroll period, reporting or correction.

What a clean holiday pay setup looks like

A clean setup does not need to be complicated, but it must be deliberate.

First, the employment contract and payroll setup should match. The company should know whether the employee receives salary during holiday or holiday allowance.

Next, the payroll system should use correct salary codes. This matters because holiday allowance calculations depend on the nature of the payment.

The payroll review should include holiday balances each month, especially before summer and before year-end. Waiting until an employee complains usually makes the issue harder to fix.

The bookkeeping should also reflect payroll reality. Holiday pay does not only belong on the payslip. Depending on the employee type and timing, it can represent a liability, a cost and a future payment.

Finally, employers should document corrections. If a holiday balance changes, the reason should remain clear. This is especially important when several people handle payroll, bookkeeping and employee communication.

Why this is especially important for foreign-owned Danish companies

Foreign-owned Danish companies often use international HR templates, group-level policies and home-country assumptions. That may work for some internal HR processes, but it can create problems in payroll.

Danish payroll follows a detailed rule set. Salary, A-tax, AM-bidrag, pension, benefits and holiday pay all need correct setup. A Danish employee may also have specific expectations because they can see holiday information digitally and may know the local rules better than the foreign management team.

For startups and smaller ApS companies, the issue often appears when the first employee asks about holiday allowance, or when the first employee resigns. At that point, the company needs payroll, bookkeeping and legal understanding to meet each other.

The safest approach is to set it up correctly before the first payroll run.

How Andreas Regnskab can help

Andreas Regnskab helps foreign founders and international companies understand Danish payroll in practical terms. We can review whether your employee setup matches the Danish holiday pay rules, whether payroll reporting has stayed consistent, and whether bookkeeping reflects the payroll balances correctly.

This support is especially relevant if your company hires in Denmark for the first time, switches payroll systems, prepares for summer holiday, or handles a resignation.

The goal is not only to process payroll. The goal is to make sure the company understands what the payroll shows and why. For a wider overview of Danish payroll risks, you can also read our article on Payroll in Denmark: Hidden Risks for Employers.

Need help with Danish holiday pay and payroll reporting?

Andreas Regnskab can help foreign employers and founders handle holiday pay, payroll reporting and employee-related bookkeeping correctly in Denmark.

Contact us for a review

Conclusion

Holiday pay in Denmark contains more technical detail than many foreign employers expect. The rules affect monthly payroll, digital employee information, FerieKonto, Feriepengeinfo, final payslips and bookkeeping.

A good payroll setup should answer three questions clearly: which holiday model applies to each employee, how the payroll system calculates and reports holiday pay, and whether bookkeeping matches the employee-related payroll balances.

When these points are clear, Danish holiday pay becomes manageable. When employers ignore them, errors often surface at exactly the wrong time: before summer, after year-end, or when an employee leaves.

Disclaimer

This article provides general information only and should not be treated as legal or tax advice. The correct treatment depends on the specific facts of each case, including employment contract, role, salary type, collective agreement and payroll setup. If your situation is complex or high-value, professional advice should be obtained before decisions are made.

FAQ

Does every employee in Denmark earn holiday?
Employees generally earn holiday when they work in Denmark. The ordinary rule is 2,08 holiday days per month, corresponding to 25 holiday days over a full holiday year. Some roles and working arrangements require separate review.

What is the difference between holiday with salary and holiday allowance?
Holiday with salary means that the employee receives normal salary during holiday and usually also earns holiday supplement. Holiday allowance gives the employee a separate holiday payment, often calculated as 12,5 % of salary before AM-bidrag and A-tax.

What is FerieKonto?
FerieKonto administers holiday allowance for employees who do not use another approved holiday arrangement. Employees can normally view and claim holiday allowance digitally.

What is Feriepengeinfo?
Feriepengeinfo forms part of the digital holiday information system. It helps employees access holiday information and supports holiday allowance administration.

Do monthly paid employees need holiday supplement?
Monthly paid employees with holiday with salary normally receive a holiday supplement. The standard supplement equals 1 % of pay for the holiday year, unless a collective agreement or employment terms create a different result.

What happens to holiday pay when an employee resigns?
The employer must review earned and unused holiday when employment ends. Depending on the employee’s holiday model, the company may need to settle or report remaining holiday allowance and handle transferred holiday or holiday supplement.

Can an employee get holiday pay without taking holiday?
In many situations, holiday allowance links to actually taking holiday. However, Danish rules allow payment without holiday in certain specific cases, such as holiday in excess of four weeks or some situations after employment ends. Employers should check the requirements carefully.

Should foreign employers use their home-country holiday policy in Denmark?
Foreign employers can use internal HR policies for some operational matters, but Danish payroll must follow Danish holiday pay rules. The Danish employment and payroll setup should therefore receive a separate review.

Sources and further reading

Official Danish public guidance

Legislation

Our article

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