Statutory holiday entitlement
The statutory minimum holiday in Germany is set out in the Federal Holiday Act (Bundesurlaubsgesetz, BUrlG). In principle, employees are entitled to at least 24 working days of holiday per year based on a 6-day week. For a 5-day week, this equals 20 working days of holiday. This entitlement applies regardless of industry or company size. It is mandatory, which means the employer cannot reduce it unilaterally.
Calculating holiday entitlement: Holiday entitlement can be calculated pro rata if an employee works for the company for less than a full calendar year or has a part-time job. The calculation works as follows:
Holiday entitlement=days per week×4
Example: An employee works three days a week. Their annual holiday entitlement is then 12 working days (3 days x 4).
Special rules and collective agreements
On top of the statutory minimum holiday, collective agreements, works agreements or individual employment contracts can grant extra days of holiday. These rules must not fall below the statutory minimum. They can define additional entitlements, such as extra holiday above the statutory minimum or special leave for certain events (e.g. a wedding or the birth of a child).
Payment in lieu of holiday: paying out holiday entitlement
Payment in lieu of holiday (Urlaubsabgeltung) applies when an employee can no longer take their holiday, for example when the employment ends. In principle, holiday should be granted as time off. A financial payment is only allowed if the holiday can no longer be granted because the employment has ended (§ 7 para. 4 BUrlG).
Calculating payment in lieu of holiday: The amount is based on the employee's average earnings in the last 13 weeks before the employment ended. This includes regular allowances and commissions the employee received during this time.
Example: An employee earns a monthly salary and still has five days of untaken holiday.
The payment would then be calculated as follows:
Payment in lieu of holiday=monthly salary/working days per month×remaining days of holiday
Holiday and illness
If an employee falls ill during their holiday, the sick days do not count as holiday, provided they have a doctor's certificate. These days count as sick days. The holiday can be taken at a later date.
Conclusion
Holiday entitlement and payment in lieu of holiday are clearly regulated in Germany. Employers must make sure their employees receive the statutory minimum holiday. Where holiday cannot be taken, they must make sure the payment in lieu is correct. For employees, it is important to know their rights so they can claim them when needed.
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