Due to the implementation of a new Holidays Act in Denmark, a transition year from 1 September 2019 to 31 August 2020 was introduced. A freeze has been imposed on the holiday allowance earned during this period, for the employees, who are covered by the Danish Holiday Act. Therefore, the employers must report their earned holiday allowance to the Holiday Allowance Fund.
Each July, the employers will receive a bill from the Holiday Allowance Fund covering the holiday allowance due to be paid. However, the employers may also choose voluntarily to pay amounts due either for all employees or just for some of the employees.
The employer is charged interest on the funds, they keep. The interest is charged per commenced month up to and including the month in which the amount is paid into the fund. The interest is charged in July for amounts, which the employer voluntarily has paid into the fund no later than 31 May. For funds, which remain with the employer on 1 June, the interest is added on top of the amount due. The interest rate corresponds to the general wage development in Denmark, which is published every year in May.