How does vacation work?

Although vacation has a central role in many people’s lives, we experience that very few understand how it is calculated and works in practice. Here we try to answer the most common questions and misunderstandings.

The number of paid vacation days is calculated in proportion to the percentage of the previous vacation year that you have worked. The holiday year runs between April 1st and March 31st, unless you have a collective agreement that has agreed otherwise. For example, someone who was hired on December 1st has worked for four out of twelve months up to and including March 31st. The law states that you are entitled to at least 25 days of vacation, so in this case the employee would receive 25 days x 5 months / 12 months = 11 days of paid vacation. The number of days is always rounded up. The employee is still entitled to 25 days of vacation, but then 14 of the days in this case will be unpaid vacation days. The paid vacation days are available from April 1st, and you do not get new days before April 1st of the following year. So, if you take vacation in the fall, you cannot take days earned after April 1st.

In addition to the duration of the employment, the calculation of paid vacation days considers absence that does not accumulate vacation days. This means that the employment period during the vacation year is adjusted with absences for which no paid vacation is earned. This is e.g. service leave, number of sick days exceeding 180 days, parental leave exceeding 120 days when there are two guardians and 180 days for single parents.

As an employee, you are not entitled to advance vacation, but it is something that can be agreed upon. The paid advance vacation in then set off against the vacation pay that is paid out in connection with the final salary if the employee resigns within five years from the start of the employment. If the employer dismisses the employee, the advance vacation must not be deducted from the final salary.

It is possible to think and calculate in different ways regarding vacation days for part-time employment, but all methods work in the same way in practice. A vacation day for someone who works at 40% duty and has a work schedule of two days a week does not work in the same way as someone who works full time. Both people are legally entitled to 25 days of vacation, and both will spend five days of vacation if they have a week off, even if the part-time worker in practice only takes two days off. So, you can either think that the one who works part-time only has 10 vacation days, or that each vacation day taken is worth 2.5 vacation days.

The vacation year is the period during which your employees can take the vacation they have earned. The accrual of paid vacation can either coincide with the vacation year, or be based on the previous vacation year. According to the Holidays Act, the holiday year is 1 April to 31 March and the accrual of paid holiday days is based on the previous holiday year. However, there are collective agreements with other provisions, e.g. that the vacation year is January 1 to December 31, and that the earning of vacation coincides with the vacation year.

If the company, as in the most common case, applies the previous vacation year as the earning year, this means e.g. that if someone is hired on May 1, that employee will not have any paid vacation days before April 1 of the following year. Then paid vacation days will have been earned from May 1 to March 31. That period has a total of 335 days, so then the employee will have earned 335/365 parts of their vacation entitlement. If the vacation entitlement is 25 days, then this means 23 paid days of vacation.

If the company applies January 1 – December 31 as a vacation year with coincident earnings, also called the current year, then the same employee will have the right to 17 paid vacation days from the start. This is because May 1-December 31 has 245 days, and 245/365 parts of 25 days are 17 days. Coinciding vacation accrual means that you can take the vacation days in the same year as the vacation year. If the employee ends his employment before the end of the year, any vacation days taken in addition to the vacation entitlement for the period as an employee will be settled on the final salary.

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