Holiday entitlement, remaining leave and payment in lieu
How much holiday are you entitled to, what happens to remaining leave when you are dismissed, and when does leave expire? Under German law it often matters whether the statutory minimum or additional contractual leave is concerned – different rules apply to each.
How much leave are you entitled to this year?
Non-binding guidance. The statutory part follows Sections 3–5 of the Federal Holiday Act (BUrlG). Your employment contract or collective agreement may contain different rules for additional contractual leave – for example pro-rating on departure or earlier expiry. Whether such clauses are valid depends on their wording (see below). Not taken into account are, among other things, leave carried over from previous years, leave granted by a previous employer in the same year, reductions for parental leave, changing working days and collective agreements. Fractions of at least half a day of statutory partial leave are rounded up.
Statutory and contractual leave
Statutory minimum
The Federal Holiday Act guarantees 24 working days based on a six-day week – 20 days for a five-day week. Severely disabled employees receive five additional days. This minimum cannot be reduced to your disadvantage.
Additional contractual leave
Many contracts provide 25 to 30 days. For the part above the statutory minimum, the parties may agree their own rules – but only if the contract clearly distinguishes between statutory and contractual leave.
Waiting period and partial leave
Full annual leave arises after six months of employment. If you cannot complete this period in your first year, or leave in the first half of a year, you receive one twelfth per full month. If you leave in the second half of the year after the waiting period, you keep the full statutory leave.
Expiry only after notice
Leave must generally be taken in the current year, for urgent reasons by 31 March. It only expires if your employer has asked you in good time to take it and warned you that it would otherwise lapse. Otherwise it carries over and does not become time-barred.
Long-term illness
If you are continuously unfit for work, statutory leave generally only lapses 15 months after the end of the leave year. Earlier expiry may be agreed for additional contractual leave.
Payment in lieu on termination
Leave that can no longer be taken because the employment ends must be paid out. During ongoing employment, statutory leave may not be paid out instead of taken. Note: contractual time limits may apply to the payment claim.
Which rules apply to which leave?
| Question | Statutory minimum | Additional contractual leave |
|---|---|---|
| Amount | 20 days for a 5-day week, +5 for severe disability | as agreed, e.g. a further 5–10 days |
| Expiry at year end / 31 March | only if the employer asked you to take it and warned of expiry | as statutory – unless the contract clearly provides otherwise |
| Long-term illness | generally lapses only 15 months after the end of the leave year | earlier expiry may be agreed |
| Leaving in the second half of the year | full annual leave, no reduction | pro-rating possible if validly agreed |
| Payment in lieu on termination | mandatory | different rules possible if clearly agreed |
| Waiver or payout during employment | invalid – even in a settlement | generally possible |
| Reduction for parental leave | one twelfth per full calendar month of parental leave, if the employer declares it | |
What determines whether a clause is valid
Employment contracts are usually standard terms and are subject to strict content and transparency review under German law. For holiday clauses this means:
Different rules on expiry, reduction or payment apply only to additional leave – and only if the contract makes clear that statutory and contractual leave are treated differently.
The clause must be clear and comprehensible. Ambiguities are resolved against the employer who drafted the contract.
Invalid for statutory leave unless the employer asked and warned beforehand. If the clause does not distinguish, it generally does not apply to any of the leave.
Statutory leave must be granted as time off. Payment instead during employment is invalid to that extent.
Invalid for statutory leave – it must be paid out when the employment ends.
Invalid when leaving in the second half of the year insofar as statutory leave would be reduced. For additional leave such a rule can be valid if it distinguishes accordingly.
Consequence: an invalid clause falls away and the statutory rule applies instead. Without a clear distinction, courts generally assume that the statutory rules apply to all leave. Collective agreements may deviate to a greater extent.
How we proceed
We distinguish statutory from contractual leave, check carry-over, forfeiture and any notices from the employer, and determine how many days are actually outstanding.
We request the granting of leave or – when employment ends – payment in lieu in the required form, observing any cut-off periods.
Outstanding leave can often be dealt with in a termination agreement. If no agreement is reached, we enforce the claim before the labour court.
Frequently asked questions
Will my remaining leave be paid out?
Only when the employment ends and the leave can no longer be taken. During employment there is no right to have statutory leave paid out.
Can my employer send me on leave during the notice period?
Yes, by irrevocably releasing you from work and offsetting this against your leave, provided this is stated clearly. A revocable release does not fulfil the leave entitlement.
Does my leave lapse if I am ill for a long time?
Statutory leave generally lapses only 15 months after the end of the leave year if you are continuously unfit for work. The contract may provide for earlier expiry of additional leave.
Can I waive my leave?
Not the statutory minimum while the employment continues – not even in a settlement. After the employment has ended, an agreement on the payment claim is possible.
Your contacts
Talk to us.
Gewürzmühlstraße 5 · 80538 Munich