feriepenge

Feriepenge is the Danish system for holiday pay. It is designed to finance paid annual leave for employees and is governed by the Danish Holiday Act (Ferieloven).

How it works: In the private sector, feriepenge generally amount to 12.5 percent of gross wages earned in the previous year. The funds are typically set aside in a feriepenge account and managed by the employer or a holiday fund. The money is not paid out with each paycheck; instead, it is available to cover wages during holiday time or, if the employee leaves, to accompany the final settlement of wages.

Usage and timing: Danish employees are entitled to five weeks (25 days) of paid annual leave. The holiday year and the distribution of holidays are regulated by Ferieloven, with the main holiday period commonly occurring between May and September. When a holiday is taken, feriepenge are paid out to cover the employee’s wages for that period. If employment ends, any remaining feriepenge must be paid to the employee, subject to the applicable rules and any collective agreements.

Scope and variations: The standard system applies to most employees in Denmark, though some sectors operate under collective agreements that may modify accrual or payment arrangements. In such cases, the basic principle remains: feriepenge are funds reserved to pay for the employee’s holiday, rather than part of regular monthly salary.

See also: Ferieloven, ferieår.