On 1 September 2025 a new Holiday Year has started and for many employers this raises questions such as: How should unused holidays be settled? What are the rules for transferring or paying out the remaining holidays? Can the employees be demanded to use their remaining holiday?

In this article, we will highlight the key questions employers need to consider at the end of the holiday year, and we will provide clear answers to help you navigate the transition effectively.

How is holiday accrued and settled in Denmark?

The Danish holiday year runs from September 1 to August 31 of the following year.

The employee accrues 25 days of holiday per holiday year, meaning the employees will accrue 2.08 holidays per month.

Holiday earned during a holiday year can be taken in the period from 1 September to 31 December of the following year. The holiday settlement year is therefore the holiday year plus the subsequent four months.

As a general rule, 20 out of the 25 days of accrued holiday must be settled in the holiday settlement year and cannot be transferred or paid out to the next settlement year.

If the 20 holidays are not settled, the days must be paid into the Labor Market Holiday Fund (in Danish: Arbejdsmarkedets Feriefond) or another private holiday fund, and the employee thereby loses the entitlement to the holidays. Payment to the Fund must be completed no later than 15 November after the end of the holiday settlement period. For holidays accrued in the period from 1 September 2024 until 31 August 2025, the deadline is therefore 15 November 2026.

If the employee is prevented from taking the 20 days of holiday within the holiday settlement year due to a holiday obstacle, such as illness or maternity leave, then the holiday shall not be paid to the Fund. Instead, the holidays can be transferred to the following holiday settlement year. If the employee is still sick or another holiday obstacle occurs in the following holiday settlement year, the transferred holidays can hereafter be paid out to the employee.

For the remaining 5 holidays, which are often referred to as the 5^th holiday week, the employee can, in agreement with the employer, transfer the holidays into the following holiday settlement year. If no agreement is made to transfer these remaining holidays, the employee is entitled to payment for these five holidays. The employer can also consider notifying the employee of the remaining holidays.

How can the 5^th holiday week be transferred?

The 5^th holiday week can in agreement with the employer be transferred to the following holiday settlement year, currently the period 1 September 2025 to 31 December 2026.

The employee has no legal right to demand transfer of these holidays, and the transfer of the 5^th holiday week always requires an agreement between the employer and the employee. This agreement must be concluded no later than 31 December 2025 for the holidays accrued in the holiday year that has just come to an end.

We recommend a short-written agreement between the employer and employee, so the payroll administration can register the changes. Confirmation by email is also sufficient.

How can the 5^th week of holiday be paid out?

If the employee was only able to use 20 days of holiday and no agreement was made to transfer the remaining holiday, the employee is entitled to payment for the 5^th week of holiday.

Employers must pay the employee for holiday that exceeds 20 days and that has not been taken or transferred to the following year, no later than 31 March 2026 for the holidays accrued in the holiday year that has just come to an end.

Payment to the employee may also be made during the period from 1 September to 31 December 2025, if the employer and employee agree.

Can the employer demand the employee to use the remaining holiday until 31 December 2025?

If the employer wants the 5^th week of holiday to be taken and not transferred or paid out, the employer may order the holiday to be taken with one month’s notice. For holiday that is to be taken by the end of December 2025, it is recommended that this is announced to the employee no later than 31 October 2025.

Recommendations

We recommend that all employers review the employees’ holiday balances now and decide how the holiday balances should be handled. For companies with many employees, it is advisable to regulate such issues in the personnel handbook or a holiday policy.

If you have questions about holidays, or would you like to receive a template for an agreement regarding transfer of the remaining holiday into the following holiday settlement year, contact us!

Your Labor Law Team