Everything You Need to Know About Holiday Money in Denmark
Denmark is one of the most sought-after work destinations in Scandinavia. Its worker-friendly policies and laws attract overseas employees from the EU and beyond. As a foreigner, you will enjoy several perks while working in Denmark. One of these perks is automatically receiving holiday allowance when you work for a Danish employer. Every full-time employee receives something known as holiday money in Denmark. This holiday money accrues over a calendar year and is disbursed the following year when you take a holiday. What more could you ask for?
Taking a Closer Look at Holiday Allowance
Holiday pay is known as feriepenge in Danish. This is the money you earn when you work and your employer pays this money into your national holiday account, also known as FerieKonto. This money is paid to you when you decide to take a holiday. However, not all employees receive holiday allowance. Some full-time employees get paid holiday in lieu of holiday pay.
You are entitled to 12.5% of your pay as holiday pay. This percentage is equivalent to about 2.08 days for each month that you work. So, if you work for 12 months, you will accrue five weeks of holiday pay.
You can get onto the National Fund for Holiday Pay and use the self-service page to determine how much holiday pay you have earned, making the entire process transparent and hassle-free.
In case you are not employed for the entire month or there are days in a month when you do accumulate holiday pay, you will be entitled to get 0.7 days of holiday for each day that you work.
Receiving Digital Holiday Pay Letter
Thankfully, you do not have to do a lot to get notified about your holiday money in Denmark. Each year, in March, just before the onset of the holiday year, you will receive a letter from your Feriepenge via Digital Post. This letter provides an overview of the holiday. In case you have not registered for Digital Post, you needn’t worry. You will receive the letter through snail mail.
On the other hand, if you do not receive a notification from the National Fund for Holiday Pay, it means that the Feriepengeinfo does not have your current address. To rectify this, you would need to register your address at the National Registration Office for Feriepengeinfo and thereafter, you will automatically receive the notification each year.
When is the Holiday Allowance Disbursed in Denmark?
Typically, you have to take your holiday in the correct year to be able to claim the holiday pay. Since the holiday pay is paid the following year, you need to begin your holiday on or after 1 May.
Once you apply for the holiday pay, FerieKonto will disburse the money to your NemKonto four working days after you apply for it online. It is prudent to remember that the allowance will usually be disbursed a month before the first day of your holiday begins.
When you apply for the holiday allowance online, it will clearly show you the party that will disburse the monies to you. This information will also be available on your holiday pay letter that you receive digitally or through regular mail.
Will the New Danish Holiday Act Affect You?
Denmark will have a new Holiday Act from 1 September 2020. According to the new act, you will still earn 25 days of holiday each calendar year but you will be able to take your holiday immediately the month after you have accrued it.
Denmark has allowed a year of transition that extends from 1 September 2019 to 31 August 2020 so that companies and employees can easily shift from the old holiday rules to the new ones. During the transition period, any holiday allowance that an employee earns will be converted into savings and will be put into a new fund. This money will not be disbursed. Instead, it will be made available to the employee when they reach the age of pension.
The Final Words
As a full-time employee, you will accrue holiday money in Denmark each calendar year. This allowance is paid out the subsequent year during the holiday period, which is from 1 May until 30 April. In case you do not get paid holiday by your organization, you can receive payment in lieu of the number of days that you do not take. Of course, it will also depend on the policy that your employer has.
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As a foreigner, if you leave Denmark or you cease to work for a Danish company, you will still be entitled to the holiday allowance that you have accrued for the duration that you worked in Denmark. You will be able to receive the entire holiday allowance amount that you have accumulated while you were working in the country. You do not need to take a holiday to get access to this amount.