Holiday rights

The holiday year is from 1 May to30 April and the holiday period is from 2 May to 15 September. Holiday pay must be paid out upon termination of employment. Holiday time is taken in consultation with the employer.

Everyone has a right to 24 days of holiday time, even if they do not have a right to holiday pay from the employer for the whole time.

Holiday rights according to the VR and SA agreement

The minimum holiday time is 24 week days (two holiday days are earned for every month worked during the holiday year). Holiday wages are 10.17% of total wages.

  • After 5 years in the same line of work the employee must have 25 holiday days and holiday pay must be 10.64%.
  • After 5 years in the same company the employee must have 27 holiday days and holiday pay must be 11.59%.
  • After 10 years in the same company the employee must have 30 holiday days and holiday pay must be 13.04%.

Earned rights due to work in the same company are renewed after three years of work in a new company, provided that this has been confirmed. Granting holiday time in excess of 20 days during the winter is permitted unless otherwise agreed.

Leave instead of December- and holiday bonuses

The employee and the employer may reach an agreement to waive or reduce holiday and/or December bonuses in exchange for time off. Such leave must be granted in the form of whole or half days.

Example: An employee earns ISK 150,000 for full-time work. His daytime wages are therefore ISK 6,922 (150,000/21.67). The holiday bonus is ISK 15.900 in the year 2004. The employee and employer may agree that the employee gets paid two days off for the holiday bonus (ISK 6,922 x 2) in addition to a payment of ISK 2,056, which is the remainder of holiday pay.

Holiday rights according to the VR and FA agreement

Minimum holiday time must be 24 week days. Holiday pay must be 10.17% of all wages, whether it is daytime or overtime. When calculating holiday time, the divisor 21.67 must be used, Saturdays not included. The first five Saturdays do not count as holiday time. With regards to holiday pay, an employee who has a minimum of one month’s notice is considered a permanent employee.

  • After 5 years in the same line of work the employee must have 25 holiday days and holiday pay must be 10.64%.
  • After 5 years in the same company the employee must have 27 holiday days and holiday pay must be 11.59%.
  • After 10 years in the same company the employee must have 30 holiday days and holiday pay must be 13.04%.

Earned rights due to work in the same company are renewed after three years of work in a new company, provided that this has been confirmed. Granting holiday time in excess of 20 days during the winter is permitted unless otherwise agreed.

What is your holiday bonus?

Holiday pay

According to current law, holiday pay must be calculated in holiday hours for each month. The holiday hours are then added up for the whole year and multiplied by current hourly wage when holiday time is taken. This means that holiday pay is wage-insured (see also law no. 30 from 1987 about vacation).

Taxes must be paid of the holiday pay as well as all other fees, as this is a normal wage payment.