Q&A - Tourist Guides

Minimum holiday under the law is 24 working days for a full holiday period, which corresponds to 10.17% holiday pay of all wages. 

As of 1 May 2024, the accrual of holiday rights is as follows for holiday that is taken in the holiday year starting 1 May 2025: 

• An employee with 8 years’ work experience, or 5 years with the same company, shall have 27 days of holiday and holiday pay shall be 11.59%.
• An employee with 12 years’ work experience, or 10 years with the same company, shall have 30 days of holiday and holiday pay shall be 13.04%. 

As of 1 May 2025, the accrual of holiday rights is as follows for holiday that is taken in the holiday year starting 1 May 2026: 

• An employee with 5 years’ work experience shall have 27 days and holiday pay shall be 11.59%.
• An employee with 10 years’ work experience shall have 30 days of holiday and holiday pay shall be 13.04%. 

1,650 working hours are equivalent to one year of work experience in the sense described above. Working hours in this sense include all hours worked in tourist guiding, and tourist guides may need to demonstrate their work experience if the employer requests it. 

Holiday is always taken in consultation with the manager. Holiday must be planned at least one month before it is due to begin. The employer should try to accommodate the employee’s wishes as far as possible due to the operation of the business, and must grant employees hired for an indefinite period at least 14 consecutive days of holiday during the period 1 April to 30 September. 

If employees are not allowed to take holiday during the period 1 April to 30 September, they should receive a 25% extension of the portion of holiday granted outside the above period, or payment equivalent to that. 

By agreement between the employee and the employer, it is permitted to cancel or reduce the holiday supplement and/or December supplement and grant corresponding time off instead, based on each individual’s wages. The time off should be granted in full or half days. 

Example: Monthly wages are ISK 550,000 for full-time daytime work. The daily wage is therefore ISK 25,381 (550,000 / 21.67). The December supplement for 2026 is ISK 114,000. The parties can therefore agree that the employee receives 4 paid days off (25,381 x 4), and the remainder is then paid, i.e. ISK 12,477.

By agreement with the employer, it is possible to take earned and accrued holiday during the notice period. However, this is only done by mutual agreement between the employer and the employee, as the main rule is that holiday and the notice period cannot run concurrently. 

The fact that holiday and the notice period cannot run concurrently means that the notice period is extended by the length of the holiday taken during the notice period.

Holiday pay does not expire between years. However, an employee is not authorised to carry over holiday days between years except in consultation with their manager, who then pays out untaken holiday days from the previous holiday year if they do not permit the days to be transferred to a new holiday year. 

If the parties agree to carry over days to a new holiday year, we recommend that the agreement is made in writing. 

The agreement with the employer determines when holiday is taken. The employer shall seek to take the employee’s wishes regarding holiday into account. The employer also has the final decision-making authority on when holiday is taken. The employer must notify the employee of the arrangement for taking holiday at least one month before the holiday begins. 

The daily wage is calculated by dividing monthly wages by 21.67, the average number of working weekdays in a month. There are 260 working weekdays in a year, which are divided by the number of months: 260/12 = 21.67. 

A part-time employee has the same entitlement as a full-time employee, but the accrual of holiday pay depends on the employment ratio/wages during the accrual period.

Statutory parental leave counts as time in employment when accrued rights are calculated. See on the website of the Parental Leave Fund. 

Parental leave is governed by Act No.144/2020 on the same subject. 

When employees have worked for the same employer for one year before going on parental leave, they are entitled to be paid the holiday supplement and December supplement during the statutory parental leave. 

Tourist guides who, at the employer’s request, do not receive summer holiday during the period when the collective agreement assumes that summer holiday is generally taken—i.e. from 1 April to 30 September each year—shall receive a 25% extension of the portion of holiday granted outside the above period, or payment equivalent to that. 

No extension applies to holiday granted outside the holiday period at the employee’s request. 

When an employee leaves one company and starts work with another, they are entitled to take holiday with the new employer as applicable, i.e. 24 or more days during the customary holiday period. The new employer must allow this and agree with the employee on taking the holiday. The employee’s holiday pay may be partially paid based on accrual with the new employer, and otherwise through the settlement of earned and accrued holiday with the former employer. 

Holiday shall be calculated on all wages, regardless of what they are called. When an employee receives additional payments such as a bonus, holiday pay must also be paid on those payments. 

However, holiday is not calculated on holiday and December supplements, nor on payments that are expressly intended to reimburse expenses paid out by the employee, such as mileage allowances and per diem allowances. 

Employees accrue holiday for the period during which they receive paid sick days from the employer. Holiday pay is paid on all wages, and you therefore always have the right to holiday for the wages you receive, whether the wages are for work, illness, or wages paid during a notice period. 

If illness is not paid by the employer but, for example, by a sick pay fund, holiday is not accrued for that period. 

An employee is entitled to have their holiday replaced with sick days for the same length of time as they are unable to enjoy their time off due to illness or an accident, provided that the illness or injury from the accident continues uninterrupted for more than 3 consecutive days and the notification obligation is fulfilled. 

The employee must notify the employer immediately on the first day that they are unable to enjoy their holiday and inform them which doctor will issue the medical certificate. 

When an employee who is not hired as the manager’s substitute covers the manager’s duties, e.g. due to holiday or illness, and the substitution lasts for one week or longer, the employee shall be entitled to compensation for such substitution, taking into account the responsibility and workload involved. The parties shall agree on such compensation before the substitution takes place. 

The holiday period under the tourist guides’ collective agreement is 1 April–30 September each year. Therefore, employers cannot arrange things so that employees are forced to take time off outside the customary holiday period unless a 25% extension is granted on the portion of the holiday that is taken outside the holiday period. 

Under the Holiday Act, holiday shall be decided with at least one month’s notice, unless both parties agree otherwise. Once holiday has been approved, neither the employer nor the employee can withdraw that approval unilaterally. 

Holiday under Article 1 of the Holiday Act No. 30/1987 shall be calculated on top of all wages. At a minimum, this is 24 days of holiday for full-year employment, or 10.17% holiday pay. 

Holiday depends on length of service in the occupation, and it is possible to agree specifically on increased holiday entitlement. 

Holiday can be calculated and paid in two ways: 

Holiday pay/holiday payments are paid to the employee when they take a holiday. Accrued holiday hours should appear on the payslip. Instructions on how to calculate holiday hours can be found below in the question on how holiday hours are calculated. 

It is possible that an agreement has been made for holiday pay to be held at a specific bank. In that case, holiday is calculated at the end of each month and deposited into a special holiday account. The calculation of holiday pay will then always appear on the payslip, showing both the amount of holiday and how much is deducted from wages and deposited in the bank. The accumulated holiday pay in the holiday account will also appear on the payslip. Holiday pay is then paid from the bank into the employee’s salary account before 15 May each year, and that amount covers the employee’s time off. 

When holiday pay is deposited in a bank, the same rules apply regarding taking holiday, i.e. the parties must agree on when the holiday is taken. When an employee is on holiday and uses, for that time, holiday pay that was deposited in the bank, that period counts as time in employment. 

When holiday pay is paid out with wages, we encourage our members to request that holiday pay be paid into a bank. 

A part-time employee has the same rights as a full-time employee, but the accrual of holiday pay depends on the employment ratio/wages during the accrual period.

When an employee leaves employment with an employer, earned and accumulated holiday must be paid out, cf. Article 8 of the Holiday Act No. 30/1987. 

Holiday accrual is at a minimum 24 days for full-year employment, or 10.17% holiday pay. People often divide that number of days by 12 months and thus conclude that holiday accrual is 2 days for each month worked. That method works if the employee uses their holiday entitlement during the holiday period, 1 April–30 September, and if they are employed for the entire accrual period, i.e. 1 May–30 April each year. Under the Holiday Act, holiday is not calculated on holiday. If an employee has only worked for 6 months with an employer, the earned holiday should be calculated in holiday hours (see more on calculating holiday hours below) and multiplied by the daytime hourly rate at the end of employment if wages have changed during that time. If wages are the same for those 6 months, it is acceptable to multiply the total wages paid by 10.17% (assuming minimum holiday entitlement), as that holiday pay will then be the same as if holiday pay was calculated in holiday hours under the collective agreement. 

Example: 

An employee has monthly wages of ISK 500,000. If you calculate based on 2 days for each month worked, after 6 months the employee has 12 days of holiday, multiplied by ISK 23,073, which is the daily wage (ISK 500,000 divided by 21.67, which is the divisor used to find the daytime daily wage). The daily wage is then multiplied by 12 = ISK 276,876. Total wages of ISK 500,000 for 6 months is ISK 3,000,000. That amount multiplied by 10.17% holiday is ISK 305,100. As you can see, if the employee does not take any holiday, they receive too little holiday pay if you only use 2 days per month and the employee has not worked the entire holiday accrual period. It is therefore more correct to calculate holiday pay using the holiday percentage if wages have not changed during the employment period, or using holiday hours if wages have changed. 

A tourist guide has monthly wages of ISK 550,000. Holiday pay is 10.17% because the employee has an entitlement of 24 days of holiday. 

The holiday is converted into accumulated holiday hours per month by dividing the holiday pay by the applicable daytime hourly rate, which in this example is ISK 3,384.62 (ISK 550,000/162.5). This means that holiday hours for May is 16.53 holiday hours (ISK 550,000 × 10.17% / ISK 3,384.62). Each holiday day taken is 7.5 hours if working five days per week.

If the employee works overtime, holiday on overtime is usually calculated each month and paid into a bank. It is possible to take overtime into account in the accumulation of holiday hours. If a tourist guide earns ISK 50,000 in overtime, the accrual of holiday hours in that case is 18.03, calculated as follows: ISK 550,000 monthly wages + ISK 50,000 overtime, multiplied by 10.17% holiday pay and divided by the daytime hourly rate, which is ISK 3,384.62. 

When an employee takes holiday for a full month and receives holiday pay that month, there is no accumulation of holiday hours that month because holiday is not calculated on holiday. 

If the employee takes, for example, 5 days of holiday in a month, the accrual of holiday hours under the collective agreement is lower than calculated above because holiday is not calculated on holiday. 

Let’s continue with the example for the tourist guide where accrual is 16.53 holiday hours for a month worked in daytime hours. If that employee takes 5 working days off, holiday hour accrual for that month is calculated as follows: agreed wages of ISK 550,000 minus ISK 126,904, which is the holiday pay for those 5 days (holiday pay is calculated by dividing monthly wages of ISK 550,000 by 21.67 to find the daily wage, which is then ISK 25,381. That amount is then multiplied by the 5 days the employee is on holiday). This leaves ISK 423,096 (ISK 550,000 – ISK 126,904), which corresponds to 12.71 holiday hours (ISK 423,096 × 10.17% / ISK 3,384.62). 

Over the holiday year, therefore, the tourist guide in the example above could have earned a total of 180 holiday hours (10.89 months worked × 16.53 holiday hours). Each holiday year is 12 months, i.e. from 1 May to 30 April, and since it is assumed that during these months the employee takes 24 days of holiday, calculations are based on only 10.89 months in employment rather than 12.