How much holiday am I entitled to when I am dismissed?
The holiday entitlement on termination depends on when in the calendar year the employment relationship ends:
| Time of leaving | Holiday entitlement |
|---|---|
| In the first half of the year (until 30 June) | Pro rata holiday: 1/12 per full month (twelfths rule under § 5 BUrlG) |
| In the second half of the year (from 1 July) | Full statutory annual holiday (20 days on a five-day week) |
Example, employment ending on 31 March: 3 full months × 1/12 of 20 days = 5 days of holiday.
Example, employment ending on 30 September: the full annual holiday of 20 days, regardless of how many days have already been taken.
Important: fractions of holiday days amounting to at least half a day are rounded up to full days.
Precondition: the qualifying period
The full holiday entitlement only arises after a qualifying period of six months (§ 4 BUrlG). During the first six months you only acquire pro rata holiday, one twelfth per month.
| Length of service | Entitlement |
|---|---|
| Less than 6 months | 1/12 of the annual holiday per full month |
| More than 6 months, leaving before 1 July | 1/12 per full month |
| More than 6 months, leaving from 1 July | Full annual holiday |
Does the remaining holiday have to be granted or paid out?
As a rule, holiday should be taken in kind, that is as actual time off. The employer may grant the remaining holiday during the notice period. If the employee agrees or is irrevocably released from work, the holiday is used up in this way.
If the remaining holiday can no longer be taken, for instance because the notice period is too short, it must be compensated financially under § 7 (4) BUrlG. This claim to holiday compensation (Urlaubsabgeltung) arises automatically when the employment relationship ends.
How is holiday compensation calculated?
The calculation follows § 11 BUrlG: the basis is the average earnings of the last 13 weeks before the holiday begins.
Formula for the daily value:
Average gross salary of the last 13 weeks ÷ number of working days in those 13 weeks = value of one holiday day
Example: with a gross monthly salary of 3,500 € and a five-day week, the daily value is roughly 161.54 €. With 8 open holiday days this results in compensation of about 1,292 €.
Not included in the calculation: overtime pay. Commissions and regular allowances, on the other hand, are taken into account.
Can remaining holiday expire?
Remaining holiday does not automatically expire when notice is given. The general expiry rules apply.
Expiry at year end and carryover until 31 March
The statutory holiday entitlement expires on 31 December of the current year. If it is carried over for urgent operational or personal reasons, the deadline is extended to 31 March of the following year.
The employer’s duty to inform
According to the case law of the Federal Labour Court and the European Court of Justice, holiday only expires if the employer informed the employee in good time and specifically about the impending expiry and asked them to take the holiday. Without such notice the holiday cannot expire.
Expiry in the case of long-term illness
If the holiday could not be taken because of illness, it expires 15 months after the end of the holiday year.
Release from work during the notice period
If an employee is irrevocably released from work during the notice period, the remaining holiday is generally deemed to have been granted, provided this is expressly stated. A mere release from work without allocating holiday is not sufficient.
The employee does not have to expressly agree to the granting of holiday, but the employer must state clearly and unambiguously that the release from work (also) serves to use up the holiday.
Remaining holiday under a termination agreement
The entitlement to remaining holiday also exists under a termination agreement (Aufhebungsvertrag). The agreement should clearly state whether the holiday will still be granted or whether it will be compensated. If there is no provision, the entitlement remains in place.
Be careful with wording such as “upon performance of this agreement all mutual claims are settled”: such settlement clauses may also cover the holiday entitlement. Check the agreement carefully.
This article provides general information and does not replace individual legal advice. Every case is different. If you have specific questions, we recommend seeking legal support at an early stage.
