Following the introduction of a new Holiday Act in Denmark, a transitional period running from 1 September 2019 to 31 August 2020 was introduced. A freeze has been imposed on holiday pay accrued during this period for employees covered by the Danish Holidays Act. Employers must therefore report the holiday pay accrued by their employees to the Holiday Pay Fund.
Every July, employers will receive an invoice from the Holiday Allowance Fund for the holiday allowance due. However, employers may also choose, on a voluntary basis, to pay the amounts due either for all employees or just for some of them.
Read more https://businessindenmark.virk.dk/guidance/loenmodtagernes-holiday-allowance-funds-bid/
The employer is charged interest on the funds they retain. Interest is charged for each month commenced up to and including the month in which the amount is paid into the fund. Interest is charged in July on amounts which the employer has voluntarily paid into the fund by 31 May at the latest. For funds remaining with the employer on 1 June, the interest is added to the amount due. The interest rate corresponds to the general wage trend in Denmark, which is published every year in May.
