Annual Leave in Germany

Annual leave in Germany is a statutory employee right rather than an optional company benefit. Every employee working under German employment law is entitled to paid time off for rest and recovery, regardless of whether they work full-time, part-time, remotely or under a fixed-term employment contract.

For international employers, annual leave administration is not limited to entering a number of days into an employment contract. Companies must correctly calculate leave entitlement, consider employees’ preferred dates, manage unused days, maintain reliable records and ensure that employees receive their normal remuneration while on leave.

Errors can result in accumulated liabilities, employee claims and disputes when employment ends. Businesses planning to hire employees in Germany should therefore establish a legally compliant leave policy before the first employee starts work.

Statutory Annual Leave Entitlement in Germany

Annual leave is principally regulated by the German Federal Leave Act, known as the Bundesurlaubsgesetz or BUrlG. The legislation grants every employee a right to paid annual recreational leave.

The statutory minimum is expressed as 24 working days per calendar year based on a six-day working week. For this purpose, working days include Monday through Saturday, excluding Sundays and statutory public holidays.

Because most employees in Germany work five days per week, the statutory entitlement is normally converted to:

20 days of paid annual leave for a five-day working week.

This represents four complete weeks of statutory annual leave.

The statutory minimum changes according to the number of days an employee regularly works each week:

WP Data Tables

The calculation is based on working days rather than the number of hours worked. A part-time employee who works five shorter days per week is therefore generally entitled to the same minimum of 20 leave days as a full-time employee working five days per week.

By contrast, an employee who works full eight-hour shifts on only three days per week would normally receive a minimum of 12 leave days. Those 12 days still provide four complete weeks away from work.

How Much Annual Leave Do Employees Usually Receive?

Although the statutory minimum for a five-day week is 20 days, many German employers provide more generous entitlements.

Employment contracts and collective bargaining agreements commonly grant between 25 and 30 days of annual leave. The Federal Ministry of Labour notes that collectively agreed leave of five to six weeks is common.

Offering 28 or 30 days is particularly common in professional services, technology, engineering, finance, manufacturing and larger corporate organisations. A competitive leave allowance can strengthen the overall package of employee benefits in Germany and support recruitment and retention in markets where qualified professionals have several employment options.

However, employers should distinguish clearly between:

• statutory minimum leave;
• additional contractual leave;
• special leave;
• public holidays;
• compensatory time off;
• unpaid leave.

This distinction is important because employers may, within legal limits, apply different carry-over, expiry or compensation rules to contractual leave exceeding the statutory minimum. Any such distinction should be explicitly and carefully drafted in the employment contract.

A vague clause referring only to “30 days of annual leave” may cause the full entitlement to be treated as one unified leave balance.

When Does the Full Leave Entitlement Begin?

Employees normally acquire their full statutory annual leave entitlement after completing a six-month qualifying period with the employer.

This does not mean an employee has no leave rights during their first six months. Before completing the qualifying period, the employee generally accrues one-twelfth of the annual entitlement for each full month of employment. The same proportional approach may apply where the employee leaves before completing the waiting period or, in certain circumstances, leaves during the first half of the calendar year.

For example, an employee with a contractual entitlement of 24 days who completes three full months of employment may accrue:

24 ÷ 12 × 3 = 6 days of leave

Where a fraction amounts to at least half a day, statutory rounding rules may require it to be rounded up to a full day.

Employers must also consider the employee’s start date and the calendar year. German leave entitlement is generally linked to the calendar year rather than the employee’s individual employment anniversary.

Example: Employee Starting in March

An employee starts work on 1 March and works five days per week. Their contract provides 30 days of annual leave.

After completing the six-month qualifying period at the end of August, the employee may generally acquire the full annual entitlement for that calendar year, subject to the detailed contractual and statutory circumstances.

The employer should not automatically assume that the employee is limited to 10 months’ proportional leave simply because they started in March.

This is a common payroll and HR administration error among foreign employers using anniversary-based leave systems.

Annual Leave for Part-Time Employees

Part-time employees are protected by the principle of equal treatment. Their annual leave should be calculated according to the number of working days per week, not simply reduced according to salary or weekly working hours.

A useful calculation is:

Full-time annual leave entitlement ÷ full-time working days per week × employee working days per week

For example, where a full-time employee receives 30 days based on a five-day week, an employee working three days per week would receive:

30 ÷ 5 × 3 = 18 days

Those 18 days provide the same six weeks of annual leave as the 30 days granted to a five-day employee.

Employers should pay particular attention to employees whose schedules change during the year. If an employee moves from five working days to three working days per week, the leave balance may need to be recalculated without unfairly reducing leave already earned.

The correct treatment depends on when the entitlement arose, when the schedule changed and whether leave was already taken.

Requesting and Approving Annual Leave

Employees do not generally have an unrestricted right to take leave whenever they choose. They should submit a leave request and receive approval before beginning their absence.

At the same time, the employer must consider the employee’s preferred dates. A request may normally be refused only where:

• urgent operational requirements prevent approval; or
• other employees have competing leave requests that deserve priority on social grounds.

German law expressly requires employers to take the employee’s wishes into account unless urgent operational reasons or socially prioritised requests from other employees justify a different decision.

Relevant social considerations may include:

• employees with school-age children requesting school holiday periods;
• employees whose partners can only take leave during a particular period;
• previous allocation of popular holiday dates;
• health or family circumstances;
• operational fairness within the team.

A general statement such as “the department is busy” may not be sufficient to reject every leave request during an extended period. Employers should assess the actual operational impact and apply their policy consistently.

Employees should not take leave without approval. Unauthorised absence may constitute a breach of contract and can, depending on the circumstances, lead to disciplinary action.

Can an Employer Determine When Employees Take Leave?

Employers may influence leave scheduling but should not disregard individual employee preferences.

Company-wide shutdowns or mandatory leave periods, known as Betriebsferien, may be permissible where legitimate operational reasons exist. Examples include a factory closure over Christmas, a seasonal business shutdown or a period when the entire operation cannot function effectively.

However, employers should not normally allocate the employee’s entire annual entitlement through mandatory leave. Employees should retain a meaningful portion of their leave for personal use.

Mandatory leave periods should be announced sufficiently in advance and supported by the employment contract, collective agreement, works agreement or a clear operational justification.

Where a works council exists, the introduction and administration of general leave principles and company shutdown periods may also involve co-determination rights.

Continuous Leave and Splitting Annual Leave

The purpose of annual leave under German law is to provide genuine rest and recovery. Leave should therefore generally be granted as a continuous period unless operational or personal reasons require it to be divided.

Where leave must be split and the employee is entitled to more than 12 statutory working days, one period should generally include at least 12 consecutive working days under the six-day-week model.

In a five-day workplace, this principle broadly supports providing an employee with the opportunity to take at least two consecutive working weeks of leave.

Employers should avoid creating policies that force employees to take annual leave only as isolated single days. Although individual days may be requested and approved, employees must also have a realistic opportunity to take a longer restorative break.

Annual Leave and Public Holidays

Public holidays are separate from annual leave.

Where a statutory public holiday falls on a day when the employee would normally work, that day should not generally be deducted from the employee’s annual leave balance.

For example, an employee takes leave from Monday to Friday, and Thursday is a statutory public holiday at their place of work. Only four annual leave days should normally be deducted.

This requires employers to identify the correct public holiday calendar. Public holidays vary between Germany’s federal states, and the relevant holidays usually depend on the employee’s place of work rather than the employer’s foreign headquarters.

Businesses operating remote teams across several German states may therefore need different holiday calendars for different employees.

The relationship between public holidays, remuneration and leave should be managed together with the employer’s broader payroll compliance in Germany processes.

How Employees Are Paid During Annual Leave

Annual leave in Germany is paid. The employee should continue to receive their normal remuneration during the approved absence.

Statutory holiday pay, known as Urlaubsentgelt, is generally calculated using the employee’s average earnings during the 13 weeks preceding the beginning of the leave. Additional remuneration paid specifically for overtime is excluded from the statutory calculation. Permanent salary increases during the calculation period or during leave should be taken into account.

For employees receiving a fixed monthly salary, regular salary normally continues without interruption.

The calculation may be more complex for employees who receive:

• variable commissions;
• shift allowances;
• performance-related remuneration;
• irregular working hours;
• recurring bonuses;
• piece-rate pay.

Employers should distinguish between Urlaubsentgelt, which is the employee’s normal statutory remuneration during leave, and Urlaubsgeld, an additional holiday bonus.

Urlaubsgeld is not automatically required by the Federal Leave Act. It may become payable where it is provided by:

• the employment contract;
• a collective bargaining agreement;
• a works agreement;
• an established company practice.

An employer should therefore avoid promising a “holiday payment” without clearly defining whether this refers to normal paid leave or an additional benefit.

What Happens If an Employee Becomes Sick During Annual Leave?

An employee does not necessarily lose annual leave days when becoming ill during an approved holiday.

Days of medically certified incapacity for work are not counted as annual leave if the employee provides the required medical evidence.

For example, an employee takes ten days of leave but is medically certified as unfit for work for three of those days. The three certified sick days should normally be restored to the employee’s annual leave balance.

The employee should:

• inform the employer promptly;
• follow the company’s sickness notification procedure;
• obtain an appropriate medical certificate;
• provide the required evidence within the applicable deadline.

The employee may not automatically extend the holiday by three days. The restored leave must usually be requested and approved separately.

International employers should ensure that their sickness and leave policies work together, particularly where employees travel abroad and obtain medical evidence from a foreign healthcare provider.

Carrying Annual Leave Into the Next Year

The general rule is that annual leave should be granted and taken during the relevant calendar year.

Transfer into the following year is normally permitted only where urgent operational reasons or personal circumstances prevented the employee from using the leave. Where leave is validly carried over, the statutory rule generally requires it to be used during the first three months of the following calendar year.

However, employers should not assume that unused statutory leave automatically expires on 31 December or 31 March.

German Federal Labour Court case law requires employers to take an active role. In general, the employer must:

1. tell the employee how much leave remains;
2. request that the employee take the leave in time;
3. clearly explain that the leave may expire if it is not taken.

The employer should refer to the specific leave entitlement and the relevant leave year. Unused statutory leave generally expires only where the employer has genuinely enabled the employee to take it and the employee then voluntarily decides not to do so.

A general sentence in the employment contract stating that leave expires at year-end is unlikely to be sufficient on its own.

Practical Employer Procedure

A compliant annual leave process may include:

• a leave balance statement during the year;
• a written reminder in the third quarter;
• a second reminder before year-end;
• clear notice of the potential expiry date;
• documented evidence that the employee had a realistic opportunity to take leave.

This reduces the risk of large historic leave balances accumulating unnoticed.

Long-Term Sickness and Annual Leave

Long-term sickness creates additional complexity.

Employees may continue to accrue statutory annual leave while medically unable to work. However, the entitlement does not necessarily remain available indefinitely.

Where an employee has been continuously unable to work from the beginning of the relevant leave year, the statutory entitlement may generally expire 15 months after the end of that leave year, even where the employer’s normal leave reminders could not have enabled the employee to take leave.

The analysis can be different where the employee worked for part of the leave year before becoming continuously ill. In that situation, the employer’s failure to inform and encourage the employee to take leave before the illness may affect whether the entitlement expires.

Because long-term sickness cases depend heavily on timing and documentation, employers should review them individually rather than automatically deleting leave balances after 15 months.

Annual Leave During Maternity Protection and Parental Leave

Periods covered by statutory maternity employment prohibitions are generally treated as employment periods when calculating paid annual leave. An employee does not lose entitlement simply because she could not work during a statutory maternity protection period.

Parental leave is treated differently.

An employer may reduce annual leave entitlement by one-twelfth for each full calendar month of parental leave. However, the reduction is not always automatic. The employer should make and communicate the reduction decision in accordance with the applicable legal requirements.

Where an employee continues to work part-time for the same employer during parental leave, different rules may apply.

Unused leave remaining before maternity or parental leave may also need to be granted after the employee returns. Employers should maintain accurate historical balances rather than treating the absence as cancelling previous entitlements.

Additional Leave for Employees With Severe Disabilities

Employees officially recognised as severely disabled may be entitled to additional paid annual leave.

Under Section 208 of Book IX of the German Social Code, an employee working five days per week generally receives five additional paid leave days per year. The entitlement is adjusted proportionally where the employee works more or fewer than five days per week.

For example:

• five-day week: five additional days;
• four-day week: four additional days;
• three-day week: three additional days.

Collective agreements, employment contracts or internal policies may provide more favourable rights.

Employers should handle disability information confidentially and ensure that leave administration does not expose sensitive personal data unnecessarily.

Annual Leave for Employees Under 18

Young employees receive enhanced protection under the German Youth Employment Protection Act.

The statutory entitlement depends on the employee’s age at the beginning of the calendar year:

• employees under 16: at least 30 working days based on a six-day week;
• employees under 17: at least 27 working days;
• employees under 18: at least 25 working days.

Young employees working underground in mining receive additional leave.

Employers hiring apprentices or other workers under 18 should not apply the standard adult minimum without checking the employee’s age and working schedule.

Annual Leave When Employment Ends

Where employment ends, the employer should first determine whether the employee can take the remaining leave during the notice period.

Unused statutory leave may only be replaced with a cash payment where it can no longer be taken because the employment relationship is ending. The Federal Leave Act requires financial compensation where outstanding leave cannot be granted before termination.

This payment is commonly known as Urlaubsabgeltung.

Employers should calculate:

• leave entitlement for the relevant year;
• leave already taken;
• the employee’s departure date;
• whether the six-month qualifying period was completed;
• whether departure occurs in the first or second half of the year;
• any valid contractual rules for additional leave;
• the employee’s relevant average earnings.

Where an employee leaves before completing six months, or after completing the qualifying period but during the first half of the calendar year, proportional entitlement may apply.

Where the employee leaves in the second half of the year after completing the qualifying period, the employee may in certain circumstances be entitled to the full statutory minimum for that calendar year.

Employers must also provide a certificate showing how much leave was granted or financially compensated during the current calendar year. This helps prevent the employee from receiving duplicate statutory leave from a new employer.

Can Employees Receive Cash Instead of Taking Leave?

During an active employment relationship, statutory annual leave should normally be taken as time off. Employers and employees cannot generally agree to replace the statutory minimum with additional salary simply because the employee prefers to continue working.

The purpose of annual leave is health protection and recovery. A contractual arrangement under which an employee “sells” the statutory leave entitlement while remaining employed may therefore be invalid.

Cash compensation is generally reserved for outstanding leave that cannot be taken because employment is ending.

Additional contractual leave above the statutory minimum may allow more flexible treatment, but only where the employment contract clearly distinguishes it from statutory leave and the arrangement complies with mandatory law.

Working During Annual Leave

Employees should not perform paid work that conflicts with the recreational purpose of annual leave.

The Federal Leave Act prohibits gainful activity during leave where that activity is inconsistent with rest and recovery.

This does not necessarily prohibit every personal activity, voluntary project or minor task. The relevant question is whether the activity undermines the purpose of the leave or breaches other contractual duties, such as confidentiality, non-competition or the requirement to obtain approval for secondary employment.

Employers should avoid overly broad policies that prohibit all activity during annual leave without considering its nature.

Common Annual Leave Compliance Mistakes

International employers frequently make errors because they apply policies from their home country without adapting them to German law.

Typical problems include:

• granting fewer than four weeks of statutory leave;
• calculating part-time leave according to hours rather than working days;
• deducting public holidays from annual leave;
• treating medically certified sickness days as holiday;
• automatically cancelling leave on 31 December;
• failing to notify employees of unused leave;
• paying out statutory leave during active employment;
• applying anniversary-year leave systems without adaptation;
• incorrectly reducing leave during parental leave;
• failing to distinguish statutory and contractual leave;
• miscalculating leave when employment ends;
• applying one public holiday calendar to employees working in different federal states.

These mistakes can create significant financial exposure, particularly where unused leave has accumulated over several years.

Annual Leave Policy Checklist for Employers

A reliable annual leave policy should explain:

• the employee’s annual entitlement;
• the applicable leave year;
• how part-year entitlement is calculated;
• how leave requests should be submitted;
• who approves requests;
• how competing requests are prioritised;
• how much notice employees should provide;
• how public holidays are treated;
• what happens if an employee becomes sick during leave;
• whether contractual leave is treated differently from statutory leave;
• the carry-over procedure;
• how and when employees will receive expiry reminders;
• how leave is handled during parental leave;
• how outstanding leave is managed upon termination.

The policy should align with the employment contract, HR system, payroll data and actual management practices.

A carefully drafted policy has limited value where managers routinely approve leave through informal messages that are never entered into the central HR system.

Managing Annual Leave for International Teams

Foreign companies employing staff in Germany should manage annual leave as part of the wider employment compliance framework.

The annual leave process should connect with:

• the German employment contract;
• payroll calculations;
• public holiday calendars;
• sickness reporting;
• maternity and parental leave;
• working time records;
• termination procedures;
• employee benefits administration.

Companies should also ensure that overseas managers understand that employees in Germany may have stronger statutory leave protections than colleagues in other countries.

A manager based abroad should not reject leave, cancel approved holiday or require employees to work during leave without consulting the company’s German HR or legal support.

Businesses without a German legal entity may use an Employer of Record in Germany to manage local employment contracts, leave administration, payroll and statutory compliance. Companies building a larger permanent operation may instead establish a German entity and develop their own local HR infrastructure.

Brain Source International supports international companies with compliant hiring, employment administration, German Payroll Taxes, Employee Benefits in Germany and ongoing HR support.

Frequently Asked Questions About Annual Leave in Germany

How many annual leave days are employees entitled to in Germany?

The statutory minimum is four weeks per calendar year. This equals 20 days for an employee working five days per week or 24 days for an employee working six days per week. Many employers provide between 25 and 30 days.

Is annual leave paid in Germany?

Yes. Employees are entitled to their normal remuneration during statutory annual leave. Variable pay may need to be included in the calculation where it forms part of the employee’s regular earnings.

Are public holidays deducted from annual leave?

No. A statutory public holiday that falls on an employee’s normal working day during approved leave should not generally be deducted from the leave balance.

Can an employer reject an annual leave request?

An employer may reject specific dates where urgent operational requirements exist or where another employee’s request deserves priority for social reasons. The employee’s preferred dates must still be properly considered.

Does unused annual leave expire at the end of the year?

Not automatically. Employers generally need to inform employees of their outstanding entitlement, encourage them to take it and clearly warn them about possible expiry.

Can annual leave be carried over to the following year?

Yes, where urgent business reasons or personal circumstances prevented the employee from taking it. Statutory carried-over leave is generally intended to be used by 31 March, subject to employer notification duties and special rules for sickness.

What happens when an employee becomes ill during annual leave?

Medically certified days of incapacity for work are not counted as annual leave. The employee must follow the relevant notification and evidence requirements.

Can an employee be paid instead of taking annual leave?

Statutory leave should normally be taken as time off. It may generally be paid out only where the employment relationship ends and the remaining leave can no longer be taken.

Do part-time employees receive fewer weeks of leave?

No. Their entitlement is adjusted according to the number of days worked each week so that they receive the same number of weeks away from work as comparable full-time employees.

Can annual leave be reduced during parental leave?

An employer may generally reduce annual leave by one-twelfth for each full calendar month of parental leave. The reduction should be properly declared and administered rather than assumed to occur automatically.

Compliant Annual Leave Management in Germany

Annual leave in Germany is closely connected to employment contracts, payroll, sickness absence, working time and termination procedures. Employers should not treat it as a simple administrative balance that disappears automatically at the end of the year.

A compliant system should calculate entitlement correctly, document approvals, monitor unused leave and give employees a genuine opportunity to take their statutory time off.

Brain Source International helps international companies employ and manage staff in Germany without building every HR, payroll and compliance process internally.

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