Unused Holiday When You Leave: You're Entitled to a Payout

Unused holiday doesn’t disappear when your employment ends in Germany. Your employer has to pay it out – if you know to claim it. Here’s how.

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Your unused holiday is worth money.

When your employment ends with unused holiday remaining, your employer has to pay it out. The entitlement comes directly from § 7 (4) of the Federal Leave Act (Bundesurlaubsgesetz), not from your contract. Employers frequently don’t volunteer this, and some push back on it. The claim is real either way.

When does the right to a payout arise?

The entitlement applies when you couldn’t take the holiday before the employment ended: the notice period was too short, you were signed off sick during it, the employer refused to approve leave, or the employment ended by mutual agreement without time to use remaining days.

It doesn’t matter who terminated the employment. Resigned, dismissed, or mutual agreement: the same rules apply.

How is it calculated?

The daily rate is based on your average earnings over the last 13 weeks of employment, including regular supplements, but excluding one-off payments like a Christmas bonus.

A rough example: 25 days annual leave, 10 days remaining unused, monthly gross salary €3,500. Daily rate: approximately €160. Payout: approximately €1,600.

What employers say

„Your holiday has lapsed." Often wrong. Under settled case law from the Federal Labour Court and the European Court of Justice, holiday only lapses if the employer explicitly reminded you in good time to take it and warned you it would otherwise lapse. Many employers have never done this. If they haven’t, even holiday from previous years may still be claimable.

„That’s not in your contract." The entitlement comes from statute, not from the contract. More on how German statutory law works and why contracts don’t override it: civil law vs. common law.

Deadlines

Your contract may contain an exclusion period, typically three months from the end of employment to assert the claim, sometimes followed by another three months to file in court. Check your contract and act within those periods. If in doubt, assert the claim in writing immediately.

After your employment ends, if your employer doesn’t proactively settle the outstanding holiday, send a written demand without delay: number of days, calculation basis, payment deadline. If they dispute it or don’t respond, a lawyer’s letter resolves most of these without going to court.

FAQ

I’m still in my notice period. Can I demand the payout now? No. Until the employment actually ends, your employer can direct you to take the holiday instead. The cash claim arises at the end of employment.

I have holiday from last year still outstanding. Is that included? Possibly. Holiday only lapses if the employer properly warned you it would. Many haven’t. Whether older entitlements survive depends on the specifics of your situation.

My employer says I agreed to forfeit unused holiday in my contract. Is that valid? For the statutory minimum holiday (20 days on a five-day week), you can’t waive the payout entitlement in advance. Clauses purporting to do this are generally invalid.

My employer is insolvent. Is there still a claim? Yes, but different rules and tight deadlines apply. Get advice immediately.

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