Holiday pay: What employees really need to know!

Holiday pay: What employees really need to know!

Holiday pay is welcome financial support for many employees, but is not mandatory. According to the Antennas Münster Holiday pay is a voluntary special payment from the employer to which there is no general entitlement. During vacation days, employees receive their normal salary, so that they are financially secure even without vacation pay.

Holiday pay is usually paid out in June or July. The amount of this payment is not regulated by law and can vary greatly. However, collective or individual agreements, such as those set out in collective agreements or employment contracts, can give rise to entitlements to holiday pay. If employers pay holiday pay without reservation over several years, this can lead to a so-called entitlement through company practice.

Claims and regulations

Loud Haufe There is no legal entitlement to holiday pay. Instead, claims can only arise through specific agreements in individual contracts or through collective bargaining agreements. Employees are often not entitled to holiday pay, especially during parental leave, unless otherwise agreed.

Payments should not be formulated as a contractual obligation as this could give rise to entitlement to holiday pay. Instead, legal experts recommend communicating payments as a voluntary commitment. It should be noted that once a company practice has arisen, it can be revoked through a works agreement as long as the basic rights of the employees are preserved.

Tax aspects and further information

Holiday pay is fully subject to income tax and social security contributions. As the Lawyer Bach listed, it is one of the special bonuses alongside other benefits such as Christmas bonuses or anniversary bonuses. An entitlement to holiday pay can also exist if the employee has been unable to work for the entire year, as holiday pay is carried over up to 15 months after the end of the holiday year.

In addition, employers can offer recovery allowances as alternative, voluntary payments, which can also be paid out without social security contributions under certain circumstances. A further regulation stipulates that vacation pay can be reduced by up to a quarter per sick day in the event of incapacity for work.

Overall, it can be seen that the entitlement to holiday pay depends heavily on the individual contractual regulations and company practice. Employees should be aware of the conditions for granting holiday pay in their particular case.