The Danish Holiday Act: How holiday pay, accrual, and the 25-day entitlement work

The Danish Holiday Act (Ferieloven) gives every employee in Denmark the right to 25 days of paid holiday per year. That much is clear. What catches international employers out is how the system works in practice. Denmark switched to a simultaneous holiday accrual model in September 2020, and the rules around accrual periods, payment methods, frozen holiday funds, and employer obligations are more involved than the headline number suggests.

This guide explains the system as it works now, so you can comply with it properly and budget for the real cost.

Under the Danish Holiday Act, employees accrue 2.08 days of paid holiday for every month of employment. Over a full year, that totals 25 days. This applies to all employees regardless of whether they work full-time or part-time, though part-time employees receive proportional pay during their holiday.

The 25 days are measured in working days (Monday to Friday), not calendar days. An employee who takes a full week of holiday uses five days.

Holiday is a right, not a bonus. Employers cannot buy out holiday entitlement or replace it with a cash payment during employment. The employee must take their holiday. There are limited exceptions for carried-over days beyond the statutory 20 days (the fifth week), but the core entitlement must be used.

Before September 2020, Denmark used a split accrual system where employees earned holiday in one calendar year and took it in the following “holiday year” starting in May. This meant new employees could wait up to 16 months before having any paid holiday.

The current system is simultaneous. Holiday earned from 1 September to 31 August is available during the same period. The holiday year and the earning period now overlap. An employee who starts work in October begins accruing immediately and can take those earned days from the following month.

This is better for employees, especially new starters and people changing jobs. For employers, it means you need to track accrual carefully from day one and have funds available to cover holiday pay as employees take their earned days.

Earning period. 1 September to 31 August. Holiday accrues at 2.08 days per month throughout this period.

Holiday period. 1 September to 31 December of the following year. This gives employees 16 months to use the holiday they earned in the earning period.

Main holiday (hovedferie). Employees are entitled to take three consecutive weeks (15 days) of their holiday during the main holiday season, which runs from 1 May to 30 September. Employers can require employees to take their main holiday during this period but must give at least three months’ notice.

Remaining holiday. The remaining 10 days (two weeks) can be taken at any point during the holiday period, subject to employer agreement. Employees and employers must agree on the timing, but the employer cannot unreasonably refuse.

There are two models for holiday pay in Denmark. Which one applies depends on the employment relationship.

FerieKonto is Denmark’s public holiday pay administration fund. Employers who use the 12.5% model must deposit holiday pay into FerieKonto (or an approved private holiday fund) no later than the last banking day of the month following the month in which the holiday pay was earned.

Employees registered with FerieKonto can request payouts when they take holiday through the FerieKonto online portal (borger.dk). The money is released automatically if the employee has notified FerieKonto of their holiday dates.

Some employers, particularly larger ones, operate their own approved holiday funds instead of using FerieKonto. The administrative obligations are similar, but the employer manages the payments directly.

The 25-day entitlement consists of four weeks (20 days) of “main” holiday under the EU Working Time Directive and a fifth week (5 days) of additional holiday under Danish law.

The first four weeks cannot normally be carried over. If an employee does not take them during the holiday period, they are forfeited unless the employer failed to make it possible for the employee to take the holiday (in which case the employer must pay compensation).

The fifth week is more flexible. The employee and employer can agree in writing to carry over the fifth week to the following holiday period. If they do not agree, and the employee does not take the fifth week, the employer must pay the equivalent value into the employee’s holiday fund.

Some collective agreements allow additional carry-over provisions. Check the applicable agreement.

If an employee falls ill before or during their holiday, they may be entitled to replacement holiday days.

Illness before holiday starts. The employee is not required to start their holiday while sick. The holiday is postponed, and the employee is on sick leave instead.

Illness during holiday. If the employee reports the illness on the first day and provides a doctor’s certificate (at the employee’s own expense unless the collective agreement states otherwise), they are entitled to replacement holiday days after a qualifying period of five sick days during the holiday year. This means the first five days of illness during holiday in any holiday year are absorbed by the holiday. From the sixth day onwards, the sick days are replaced.

This is an area where international employers often fail to inform employees of their rights. Danish employees are generally aware of these rules and will expect them to be followed.

Public holidays are separate from the 25-day holiday entitlement. Denmark has approximately 11 public holidays per year, including New Year’s Day, Maundy Thursday, Good Friday, Easter Monday, Great Prayer Day (Store Bededag was abolished as a public holiday from 2024 onwards, replaced by an additional working day), Ascension Day, Whit Monday, Christmas Day, and the Second Day of Christmas.

Note the change regarding Store Bededag. The Danish government removed it as a public holiday effective from 2024. Employees who previously had this day off now work it, with compensation arrangements varying by collective agreement. International employers should verify current public holiday schedules with SKAT or their EOR provider.

For employees not covered by a collective agreement, there is no statutory right to paid public holidays, though it is near-universal practice to provide them. Most collective agreements guarantee paid public holidays.

Holiday pay is a real cost that must be budgeted alongside gross salary. Under the 12.5% model, it is an explicit 12.5% addition to qualifying earnings. Under the holiday-with-pay model, it is baked into salary but topped by the holiday supplement.

For a detailed breakdown of all Danish employer costs including holiday pay, see our guide to the true cost of a Danish employee.

Applying home-country holiday rules. The Danish system is specific. UK, US, or German holiday rules do not translate. The accrual model, the FerieKonto system, and the mandatory 25-day entitlement all need to be administered according to Danish law.

Failing to deposit holiday pay on time. Late deposits into FerieKonto result in penalties. The deadline is the last banking day of the month following the earning month.

Miscalculating holiday on termination. Converting from the holiday-with-pay model to the 12.5% model when an employee leaves is where errors happen. If in doubt, get specialist payroll support.

Not allowing the main holiday period. Employees are entitled to three consecutive weeks between 1 May and 30 September. Employers who try to restrict this without proper notice (three months) or valid business reasons face compliance risk.

Confusing working days with calendar days. Holiday is counted in working days (five-day week). An employee taking one calendar week of holiday uses five holiday days, not seven.