Holiday pay Financial compensation (payment) for untaken holiday when the holiday can no longer be granted due to termination of employment.
In accounting practice, holiday compensation is a special case in connection with outstanding holiday entitlements. In the construction industry, the classification can also depend on the industry-specific holiday procedure (see ULAK / SOKA-BAU).
Basics
Holiday is generally to be granted as time off. Payment is not the standard. Holiday pay in lieu is typically considered when an employment relationship ends and granting holiday is no longer possible within the timeframe.
Motto
Holiday pay is the exception: payment instead of leave – usually only upon termination of employment.
Legal framework
Holiday pay is regulated by employment law. In addition to the legal framework, employment contract and collective agreement regulations are also relevant for the specific calculation and handling.
In the construction industry, additional collective agreement provisions and the industry-specific holiday procedure must also be taken into account, particularly concerning the VTV and organisational integration via the ULAK.
Classification in billing
Holiday pay is a settlement component that relates to outstanding holiday entitlements. In the Payroll will the relevant data (e.g. remaining holiday entitlement) be derived from the holiday and time accounts and processed in the final settlement.
Note
The specific details depend on the individual case (e.g. remaining leave, contract end, collective agreement classification).
Special features in the construction industry
In the construction industry, holiday processing can be integrated into a compensation system via collective agreements. Therefore, when classifying, it is important to know if and how the holiday procedure is handled via SOKA-BAU or the ULAK reaches.
Within the context of Cluster 2, the topic is closely related to Holiday entitlement (Construction), Holiday pay (construction industry) and the Payroll accounting linked.
FAQ
When is holiday pay taken into account?
Typically, when the employment relationship ends and any accrued holiday cannot be taken as time off.
Is holiday pay the same as holiday bonus?
No. Holiday pay is the payment for untaken holiday. Holiday bonus is an additional holiday payment (statutory or voluntary).
What else needs to be considered during construction?
Depending on the scope of the collective agreement, holiday processing may be integrated into the holiday procedure via ULAK/SOKA-BAU.
Conclusion
Holiday pay is the payment of untaken holiday entitlement when it is no longer possible to grant holiday due to the termination of the employment relationship. In the construction industry, this matter must also be viewed in the context of the industry-specific holiday procedure (ULAK/SOKA-BAU).
Brasser Accounting Solutions GmbH is a specialised accounting service provider and part of a corporate group with Quint GmbH (tax consultancy/auditing) and Service Place Årjäng AB (Swedish tax office). BAS exclusively performs services according to § 6 No. 3 and 4 StBerG and does not provide tax or legal advice.
