Be aware of the change in the deadline for transferring frozen holiday funds to the Employee’s Fund for Residual Holiday Funds

The Government has adopted a law amendment[1] entailing a change in the employers’ deadline for payment of frozen holiday funds to the Employee’s Fund for Residual Holiday Funds in those cases where the employer chooses to pay the accrued holiday funds immediately.



What you need to know:

If you as an employer want to pay the accrued holiday funds for one or more of your employees from the “transition period” to the Employee’s Fund for Residual Holiday Funds immediately, you must be aware that the deadline for payment has been changed.

The change implies that you as employer cannot report and pay the funds to the Fund at the same time. Instead you must start by only reporting the payment to the Fund. The deadline for reporting is, however, still on 31 December 2020, and it is therefore still important that you remember to submit the report before this deadline.

The payment of the funds can then be made in connection with the first ordinary payment which is collected before the end of July 2021 and with a deadline on 1 September 2021, which is thus the new deadline for the payment. If you in your reporting in December has stated that you want to make an aggregate payment for one or more of your employees, you will before the end of July 2021 receive an invoice for the payment of this amount with a payment due date on 1 September 2021.

If you prefer not to make a total payment for all your employees, as at 1 February 2021 it is now possible to make voluntary payments to the Fund, so that you as employer is released from your obligations to the Fund for one or more of your employees. If you choose to pay for one or more of your employees on a voluntary basis, you must choose the employee(s) the payment regards when transferring the payment through virk.dk.

If you have chosen not to fulfil your entire obligation to the Fund on a voluntary basis, you will each year in July (in July 2021 for the first time) receive a payment request from the Fund regarding the holiday funds which are due for payment. This applies for employees who from 1 March the same year and until the end of February the subsequent year will reach the retirement age, as well as employees who during the period 1 March the previous year until the end of February in the payment year have received payment of their holiday funds from the Fund for other reasons than retirement (e.g. due to death or relocation to another country).

The deadline for payment is 1 September the same year, and the payment will be added an annual indexation.

If you have any questions regarding the rules for payment of funds to the Employee’s Fund for Residual Holiday Funds or to the new Holiday Act in general, please always feel free to contact Bird & Bird.


[1] Act 2020-08-21 no. 1223 on amendment of the act on Act on the Management and Administration of Receivable Holiday Funds, the act on State Education Grant and act on Labour Market Supplementary Pension

Latest insights

More Insights