Everything you need to know about holiday pay

Not sure how holiday pay works? Holiday pay is one of the most common and important benefits that employees receive, but understanding the rules around it can be confusing. In this comprehensive blog post, we'll give you a thorough guide to holiday pay in Norway. We'll cover everything from how it's calculated to when it's payable, and why it's important to understand it to safeguard your finances.

What is holiday pay and why is it important?

Holiday pay replaces salary during vacation and is based on the income you earned the previous year. It is a statutory benefit that ensures that employees are paid even when they take vacation. Understanding holiday pay is important because it can affect your financial situation and allow you to plan your vacation without worry.

This allows employees to actually take time off and recover, which is important for both health, well-being and productivity. At the same time, holiday pay is a right that helps strengthen the balance between work and leisure, and demonstrates the employer's commitment to safeguarding employee welfare.

How is holiday pay calculated?

Typically, holiday pay is calculated as 12% of your gross salary from the previous year. This is called the accrual year . However, there are exceptions and variations depending on collective agreements and individual agreements. It is important to be aware that holiday pay is calculated from all income you earned last year, including overtime, bonuses and additional benefits. If you are employed in a company with 5 weeks of holiday (instead of 4 weeks and 1 day as required by the Holiday Act), the rate is often 14.3% .

A simple calculation on how you can calculate your own vacation pay:

If you had NOK 500,000 in holiday pay in the accrual year, and you have the standard rate (12%), your holiday pay will be:
500,000 x 0.12 = 60,000 kroner in holiday pay

When and how is holiday pay paid?

Holiday pay should normally be paid out in connection with the main vacation period, which usually takes place in June, July or August. This is intended to replace your lost salary during this period. Often, the holiday pay is paid one month before the main holiday starts. We also explain what happens if you haven't earned enough holiday pay, and what you can do to secure your finances during the holiday period.

Why is it important to understand holiday pay?

It's crucial that both employers and employees have good knowledge of the holiday pay scheme. By understanding the rules and the process, you can avoid confusion and misunderstandings when it comes to the payment and settlement of holiday. We explain why holiday pay is an important financial benefit for employees and how it can give you a well-deserved break from work.

Holiday pay is an essential part of working life, and it's important to know how it works. In this blog post, we've provided you with a comprehensive guide to holiday pay in Norway. We hope that this information will help you understand the calculations, payments and importance of holiday pay.