Questions and Answers

It was your employer’s responsibility to report your accrued holiday allowance funds for the transitional year under the new Holiday Pay Act for the pay period from 1 September 2019 to 31 August 2020.

On borger.dk, you’ll find a self-service portal where, as an employee, you can see what your employer has reported. If you’ve previously received a payment from your holiday allowance funds, you can also see how much holiday allowance you have left.

If you have any questions or disagree with the amount your employer has reported, please contact your employer.

You can find the self-service solution here.

You cannot have your accrued holiday allowance funds paid out until you leave the labour market. Your holiday allowance funds will be paid out as a lump sum.

Back in autumn 2020 and spring 2021, it was possible to have one’s accrued holiday allowance funds paid out. Both the payouts in autumn 2020 and those in spring 2021 were voluntary. It was a political decision to allow payouts for accrued holiday allowance funds during the coronavirus crisis in order to benefit the Danish economy.

Your accrued holiday allowance funds have been converted into a pension savings scheme, which can be paid out when you reach state pension age or earlier if you leave the labour market before reaching state pension age. Your savings in the Holiday Allowance Fund are therefore essentially tied up in much the same way as other pension schemes.

Your accrued holiday allowance funds are adjusted on an ongoing basis in line with the returns generated by LD Pensions, for as long as the funds are in The Holiday Allowance Fund. Everyone receives the same adjustment rate, so the profit is distributed proportionally amongst employees based on each individual’s share of the total holiday allowance funds. 

LD Pensions invests the holiday allowance funds paid into the fund by employers. The return on investment achieved forms part of the fund’s results. Employers who have chosen to retain the holiday allowance within the company must pay annual interest (corresponding to wage growth). Although employers are only required to pay this interest when they make payments of holiday allowance funds into The Holiday Allowance Fund, the interest is included in the current profit attributed to employees’ funds. The adjustment of the employees' holiday allowance thus takes place independently of when employers pay the interest.

The fund’s return consists of investment returns and interest income from funds held by employers. Pension return tax and costs are deducted from this. Pension return tax is levied only on the investment return. The costs are low, partly because a portion of the administrative costs is borne by employers.

The size of the return on investment is subject to the same degree of uncertainty as the returns on the banks’ investment portfolios and funds. The portion of holiday allowance funds held by employers is well protected against losses and, at the same time, offers a rate of return that is currently higher than the interest rates on safe bonds.

If your holiday allowance has been reported by your employer directly to The Holiday Allowance Fund – which applies to the vast majority of employees – you will be liable for standard income tax when the funds are paid out to you.

If your accrued holiday allowance funds have been reported to FerieKonto or another holiday pay fund, they will have been taxed at the time they were accrued. As the holiday allowance funds have therefore already been taxed before being reported, you do not have to pay income tax when the funds are paid out as part of the payouts.

It is natural to compare your accrued holiday allowance funds in the Holiday Allowance Fund with a retirement savings account at a bank, where an amount is deducted each year to cover pension returns tax.

The total return on holiday allowance funds consists of two parts: a return on investment and interest on the funds held by employers. In LD Pensions, the pension return tax is paid on the investment return, while the interest paid by employers on the funds held by the companies is not taxed. Your holiday allowance funds are adjusted by crediting the fund’s profit, after tax and costs have been covered. Everyone receives the same adjustment rate.

It makes no difference to you whether your employer chooses to retain your holiday allowance or has paid it into the Holiday Allowance Fund. All employees have the same percentage credited to their savings each month.

It doesn’t matter if you change jobs. Your accrued holiday allowance funds are your money. Once your employer has reported them to the Holiday Allowance Fund, it is the fund’s responsibility to ensure that you receive your accrued holiday allowance funds when you leave the labour market.

You cannot withdraw or transfer your accrued holiday allowance funds until you leave the labour market. Your holiday savings are held as a savings account in the Employees' Holiday Allowance Fund, which is managed by LD Pensions. For every year your savings are held in the Employees' Holiday Allowance Fund, a return is credited to your account. When you reach state pension age, your savings will be paid out as a lump sum. At that time, you can also choose to defer the payouts and leave your savings with the Holiday Allowance Fund until you need the money.

Should your employer go bankrupt, be wound up or be declared insolvent, the Employees’ Guarantee Fund will cover your employees' holiday allowance.

As an employee, you don’t need to keep an eye on whether your employer goes into liquidation, merges with another company or relocates abroad. It is the job of the Holiday Allowance Fund to ensure that you receive your money.

If your employer has not paid your Holiday Allowance into our account as and when it is due, the Employees’ Guarantee Fund will take over the task of collecting your Holiday Allowance from your employer.

If tax has not previously been paid on your holiday allowance funds, it will be taxed (subject to tax) at a rate of 38% when it is transferred to the Employees’ Guarantee Fund. This applies regardless of how your other income is taxed. However, you will not have to pay tax on your Holiday Allowance funds when they are paid out to you.

When tax is deducted from your holiday allowance upon transfer to the Employees’ Guarantee Fund, this affects the amount of your savings with the Holiday Allowance Fund. You can always log in to borger.dk to view your current balance.