Sick leave and vacation leave: Global policies compared

When you employ people in more than one country, sick leave and vacation leave stop being a single policy and become a set of separate legal obligations. The entitlement, the pay level and the body that funds it all change from market to market. A comparison across countries makes the differences clear and shows why a one-size approach does not hold.

This guide compares sick leave and vacation leave across several major hiring markets, looking at what employees are entitled to and who pays for it.

Statutory vacation entitlement is the easier of the two to compare, because it is usually expressed as a fixed number of days. The spread is still wide.

Across the European Union, the floor is four weeks, and most countries exceed it. France provides a high statutory entitlement, Germany sets a statutory minimum that most contracts improve on, and several countries add days based on age or length of service. Hungary, for instance, increases entitlement with the employee’s age, while Poland raises it once total work history passes a threshold. In contrast, the United States sets no federal minimum at all, leaving vacation to employer policy. Markets in Asia and Latin America often start lower and rise with service.

The lesson from the comparison is that the same job carries very different leave entitlements depending on where the person sits, and the employer has to meet each one.

Sick leave is harder to compare because the variation is not just in days but in pay level and funding. Three questions separate the systems: how long the entitlement lasts, how much is paid and who pays it.

In some European markets the employer pays sick leave directly for an initial period before a state or social security scheme takes over the cost for longer absences. In others the social security system carries most of the burden from early on. Pay levels range from full salary to a defined percentage, sometimes stepping down the longer the absence runs. The qualifying conditions differ too, with some systems requiring a waiting period or a medical certificate before pay begins.

Before sick pay rules apply, the absence usually needs to be reported correctly and supported by the required medical evidence. The waiting period, certification deadline and employer reporting duties can all differ by country.

• Waiting days determine when sick pay starts: France has two separate clocks. Daily allowances from health insurance generally start on the fourth day of absence, after a three-day délai de carence. The statutory employer top-up follows a different timetable: under the Labour Code, it begins after seven days of absence for ordinary illness and from the first day for a qualifying workplace accident or occupational illness. Once payable, it covers 90% of gross pay for the first 30 days and two thirds for the following 30 days, unless a collective agreement provides more.
• Italy also has a three-day carenza period: INPS sickness benefits generally start from day four. The first three days are paid by the employer where the applicable employment contract or collective agreement requires it.
• The UK no longer has SSP waiting days: From 6 April 2026, the previous three waiting days were abolished, so eligible workers can receive Statutory Sick Pay from the first day of sickness. The lower earnings threshold was also removed.
• Medical certificates follow a separate timetable: Some countries allow self-certification for short absences before requiring medical evidence. Others require certification immediately. In Italy, employees covered by the INPS sickness benefit generally need a medical certificate from the first day for the absence to qualify for payment.
• Employees must also meet local notification requirements: Countries and employers can set deadlines for reporting an absence and specify who must be notified. Missing those requirements can affect sick pay entitlement, so the process should be set out clearly rather than left to informal notification through a line manager.
• Employers have reporting and record-keeping duties too: Depending on the country, these can include recording the absence, processing the required social security information ce the INPS sickness allowance through payroll on the institution’s behalf.

Collective agreements can change the statutory position. They may remove or cover waiting days, increase replacement rates or provide more generous sick pay terms. Check the applicable sector or company agreement alongside the statutory rules, particularly in markets such as France and Italy.

The funding question has a direct effect on the employer’s cost, which is why it deserves attention in any comparison. Where the employer carries sick pay directly, a long absence is a real cost to the business. Where the social security system funds it, the cost is spread through the contributions already being paid.

This is one of the reasons employer social charges differ so much between countries. A market with high employer contributions often funds more generous state-backed sick leave in return, so a like-for-like comparison has to look at the contributions and the entitlements together rather than either in isolation.

Two markets with similar salaries can carry very different sick leave costs once employer contributions and salary continuation are included.

• Germany: Employers generally pay full salary for the first six weeks. Statutory health insurance then pays around 70% of gross earnings, capped at 90% of net, for up to 78 weeks for the same illness.
• Netherlands: Employers generally pay at least 70% of wages for up to 104 weeks, although contracts or collective agreements may require more.
• Why it matters: Higher employer social charges do not always mean higher overall exposure. A system that transfers sick pay to social insurance earlier can cost less during a long absence.

For a small team, that difference can materially affect payroll planning. Employer contributions also fund pensions, healthcare, unemployment and other benefits, so they should not be treated as sick leave costs alone. 

The real complexity in sick leave often starts when the initial employer-funded period ends and another system has to take over.

• Long-term sick pay varies sharply by market: German employers generally pay full salary for six weeks per illness, after which statutory health insurance pays Krankengeld at around 70% of gross pay, capped at 90% of net. In the UK, Statutory Sick Pay runs for up to 28 weeks at £123.25 a week or 80% of average weekly earnings, whichever is lower. Dutch employers carry the longest direct obligation, paying at least 70% of wages for up to 104 weeks.
• Return-to-work duties can add to that cost: In the Netherlands, employers must follow formal reintegration steps, including working with the employee and occupational health provider. Failure to meet those obligations can extend the wage-payment period, turning a process failure into a direct employment cost.
• Long absence does not automatically create a route to dismissal: Sickness-related exits are subject to separate local protections and procedures, so they need to be assessed independently. Our guide to employee offboarding covers the practical process.
• Annual leave can continue building during sickness: Under EU law, statutory annual leave continues to accrue during sick leave, with rules allowing unused leave to carry over where illness prevented the employee from taking it. For a long absence, that means the eventual cost can include both sick pay and an accrued leave balance.

Managing sick and vacation leave across a multi-country team means tracking different entitlements, pay rules and funding mechanisms simultaneously, and keeping each one current as rules change. Doing that manually, or assuming one country’s rules apply elsewhere, is where compliance slips.

An Employer of Record resolves this by applying the correct entitlements in each market automatically. As the legal employer in each country, Boundless ensures every team member receives the statutory sick leave and vacation entitlement their location requires, calculated and administered correctly. Pricing starts from €175 per month with transparent costs, and coverage spans 110+ countries backed by Payoneer, a public company listed on the NASDAQ.

Code Institute used Boundless to employ people across borders without having to compare and apply each market’s leave rules themselves, leaving the detail to the team that handles it daily.