Remaining holiday on dismissal: what you are entitled to

Remaining holiday on dismissal: what happens to it?

Dismissal does not change your holiday entitlement. Until the last day, you are an employee with all rights, whether the employer dismisses you, you resign yourself or a termination agreement is concluded.

What needs to be clarified is how many days you are entitled to in the year of leaving and whether you can still take them before the end. What can no longer be taken becomes a claim to money, payment in lieu of holiday (Urlaubsabgeltung) (Sec. 7 (4) BUrlG).

How much holiday are you entitled to on dismissal?

The statutory minimum holiday is 24 working days a year (Sec. 3 (1) BUrlG). Working days (Werktage) are all days except Sundays and statutory public holidays (Sec. 3 (2) BUrlG); with a 5-day week, this corresponds to 20 working days. How much you are entitled to in the year of leaving depends above all on the date you leave.

End by 30 June: twelfths

If your employment ends in the first half of the year, i.e. at the latest at the end of 30 June, you receive one twelfth of the annual holiday for each full month (Sec. 5 (1) (c) BUrlG). Only full months count: if the employment ends on 15 March, that is two full months, January and February.

Example: 20 days of annual holiday, leaving on 30 April. 20 x 4/12 = 6.67 days, rounded up to 7 days.

End from 1 July: full holiday entitlement

If you leave in the second half of the year and your employment had already lasted at least 6 months, you are entitled to the full statutory annual holiday. The reason: you acquire the full entitlement after the waiting period of 6 months has expired (Sec. 4 BUrlG), and under Sec. 5 (1) (c) BUrlG it is only reduced if you leave in the first half of the year.

In the first year and before the waiting period has expired

If you leave before the employment has lasted 6 months, you also receive one twelfth per full month (Sec. 5 (1) (b) BUrlG). If you started during the year and completed the waiting period in the same year, the full annual holiday may still arise.

Additional contractual holiday: the pro rata clause

For holiday that exceeds the statutory minimum, the employment contract or collective agreement can set its own rules. A pro rata clause is common: under it, the additional holiday is also reduced proportionately in the second half of the year. The statutory minimum holiday remains unaffected, because an employment contract may not deviate from it to your disadvantage (Sec. 13 (1) BUrlG). If there is no such rule, the additional contractual holiday is treated like the statutory holiday.

How is rounding done?

Fractions of holiday days that amount to at least half a day are rounded up to full days (Sec. 5 (2) BUrlG). Fractions of less than half a day are not rounded down; they remain as a fraction and must be granted or paid out accordingly.

Holiday entitlement by month of leaving: table

Assumptions: the employment has existed since at least 1 January of the year of leaving and for longer than 6 months, 5-day week, no pro rata clause and no different rule in a collective agreement. The figures are our own calculations: annual holiday x full months / 12, rounded under Sec. 5 (2) BUrlG.

Holiday entitlement in the year of leaving by leaving date (working days)

Leaving on	Full months	20 days' annual holiday (statutory)	25 days' annual holiday	30 days' annual holiday
31 Jan	1	1.67, rounded up to 2	2.08	2.5, rounded up to 3
28 Feb or 29 Feb	2	3.33	4.17	5
31 Mar	3	5	6.25	7.5, rounded up to 8
30 Apr	4	6.67, rounded up to 7	8.33	10
31 May	5	8.33	10.42	12.5, rounded up to 13
30 Jun	6	10	12.5, rounded up to 13	15
31 Jul to 31 Dec	7 to 12	20 (full entitlement)	25 (full entitlement)	30 (full entitlement)

From these days, deduct what you have already taken in the year of leaving. If, with an end in the first half of the year, you have already had more holiday than you are entitled to, the employer may not reclaim the holiday pay (Sec. 5 (3) BUrlG).

New job in the same year: You do not get the holiday twice. What your old employer has already granted you for the current year is not granted again by the new one (Sec. 6 (1) BUrlG). For this purpose, you receive a holiday certificate when you leave (Sec. 6 (2) BUrlG).

Take the holiday or have it paid out?

The law provides for time off first. Payment is only made if the holiday can no longer be granted because of the termination (Sec. 7 (4) BUrlG). You do not have a choice. So apply for your remaining holiday early, for example together with your resignation or directly after receiving the dismissal. How much time you have left depends on the notice period; see notice periods for employees.

Can the employer refuse remaining holiday?

The employer must take your holiday wishes into account. It may only refuse them if urgent operational needs or the priority holiday wishes of other employees stand in the way (Sec. 7 (1) BUrlG). This also applies during the notice period. If it refuses justifiably and you can no longer take the holiday before the end, it must pay it out.

Do not take the holiday on your own initiative. Anyone who stays away without permission risks a formal warning or even a summary dismissal.

How much money do you get for remaining holiday?

Payment in lieu of holiday is based on the average earnings of the last 13 weeks, without additional remuneration for overtime (Sec. 11 (1) BUrlG). With a fixed monthly salary, the calculation in practice is usually simplified as follows:

Daily value = 3 x gross monthly salary / (13 weeks x working days per week)

Payment in lieu of holiday in euros (gross, our own calculations)

Gross monthly salary	Working days per week	Daily value	Outstanding holiday days	Payment gross
€2,500	5	€115.38	10	€1,153.80
€3,500	5	€161.54	10	€1,615.40
€4,500	5	€207.69	10	€2,076.90
€3,500	4	€201.92	8	€1,615.36

Example calculation: You resign with effect from 31 August, have 25 days' holiday without a pro rata clause, a 5-day week and €3,500 gross. Because you leave in the second half of the year, you are entitled to all 25 days. You have taken 15, and your employer can no longer grant the remaining 10 because a project is being completed. Daily value: 3 x €3,500 / 65 = €161.54. Payment: 10 x €161.54 = €1,615.40 gross.

Payment in lieu of holiday is employment income: wage tax and social security contributions are payable. It is not severance, and the one-fifth rule does not apply to it (more in our guide on tax on severance pay). If you then become unemployed, unemployment benefit is suspended for the period of the holiday paid out (Sec. 157 (2) SGB III).

Release from work after dismissal: is holiday offset?

Whether your remaining holiday is used up during release from work depends on the type of release:

• Irrevocable release with holiday offset: If the employer clearly declares that it is releasing you irrevocably and that your remaining holiday is granted during this period, the holiday is usually fulfilled. There is then no payment in lieu.
• Revocable release: If the employer can call you back at any time, no holiday is granted, and it remains outstanding.
• Release without a statement on holiday: Whether the holiday has been offset is unclear and should be checked.

If you fall ill during a release with holiday offset and prove this with a medical certificate, the days of illness are not counted against your holiday (Sec. 9 BUrlG).

Special cases

Summary dismissal

If the employment ends immediately, the outstanding holiday must be paid out in full, calculated according to the same rules as above. Whether the summary dismissal is valid in the first place is explained in our guide on summary dismissal. Against the dismissal itself, only an unfair dismissal claim within 3 weeks helps.

Resigning yourself

If you resign yourself, you keep your holiday entitlement; the half-year rule applies in the same way. You can choose the date deliberately: an end on 31 July instead of 30 June gives you the full statutory annual holiday instead of half.

Ill until the end of the employment

If you are signed off sick until the last day, you cannot take the holiday. It must then be paid out. With long illness, statutory holiday lapses according to case law at the earliest 15 months after the end of the holiday year, i.e. at the end of 31 March of the year after next. If you still worked in the holiday year before falling ill, this only applies if the employer informed you in good time about the impending lapse.

Termination agreement

You cannot validly waive the statutory minimum holiday while the employment continues, not even in a termination agreement. So expressly settle in the agreement whether the remaining holiday is granted as time off before the end or how many days are paid out at what amount. What else belongs in a termination agreement is explained in our guide on the termination agreement. Severance should be shown separately from payment in lieu of holiday; for the amount, see severance pay by years of service.

Holiday from the previous year

Holiday must in principle be taken in the current year; carrying it over is only provided for until 31 March of the following year (Sec. 7 (3) BUrlG). According to case law, however, it only lapses if the employer has informed you in good time about the impending lapse and asked you to take the holiday. Otherwise, old holiday must also be paid out on dismissal.

Holiday bonus

The law does not require an additional holiday bonus (Urlaubsgeld). Whether you are entitled to it pro rata in the year of leaving is governed by the employment contract, collective agreement or works agreement.

Employer does not pay out holiday: how to proceed

1. Check the payslip: Compare the days and amount on your last payslip with the table and the daily value.
2. Demand payment in writing: with the number of days, the calculation, the amount and a payment deadline of about two weeks.
3. Observe exclusion periods: Many employment contracts and collective agreements require claims to be asserted in writing within a few months of falling due, otherwise they lapse. The statutory limitation period of three years (Sec. 195 BGB) is often not decisive alongside this.
4. Claim at the labour court: If the employer does not pay, you can sue for the payment in lieu. At first instance, each side bears its own lawyer's fees (Sec. 12a ArbGG).