How to carry over vacation days to the next year

In Hungary, employees are entitled to at least 20 vacation days each year. This is a paid leave, and it is the employer’s responsibility to ensure that their employees actually take these days off in the given year. In some cases, however, vacation days can be carried over to the following year. Learn how and when it is possible.

Vacation days: paid leave for everyone

In order to maintain a healthy life-work balance, every employee in Hungary can go on paid leaves. From the employer’s point of view, these are vacation days, when the employee is not doing work for the company. The number of such days is defined yearly, and it is at least 20, while extra days are given for age, raising children, and a few other things.

Although in practice it is usually the employee who requests days off, it is the employer’s responsibility to have employees use the vacation days available to them. While companies usually have detailed guidelines for how and when employees can request leaves, including their length, the required advance notice and the person to consult, considering substitution and handover, you should also track if your employees are taking days off, and assign vacation days if they do not.

When to carry over vacation days?

The rule of thumb is that the number of vacation days must be depleted during the calendar year they belong to. In some specific cases, however, employees are allowed to carry over days to the following calendar year.

If the employment relation started after 1 October, vacation days can be used up until 31 March the following year (this is because during probation, the first 3 months of employment, new hires are typically asked not to go on a vacation).
If the employees have a collective agreement, one quarter of their yearly vacation days can be used up until 31 March the following year.
In some cases, the employee cannot take their paid leave because e.g. they are on an unpaid leave, or they are incapable of work. In these cases, vacation days must be given out within 60 days after the obstacle is eliminated, e.g. the employee comes back from sick leave.
If an employee goes on a vacation at the end of the year, 5 vacation days of the old year can be used for the first 5 working days of the new year (until 7 January in 2022).
If you have made an agreement for this, at most 10 days of the extra vacation days the employee gets for their age can be carried over and used up until the end of following year. If you want to do this, make sure to sign an agreement to this effect with each employee each year!

Financial compensation for unused vacation days

It is your responsibility as an employer to have your employees use their vacation days. Even if they are not asking for a vacation, you should give out unpaid leave as suits your company and your employee best. Since going on vacation from time to time is essential for a healthy work-life balance, it is not allowed to pay more to employees in exchange for not going on a holiday. The employee cannot waive their right to paid leaves.

Financial compensation for unused vacation days is possible in one case: when the employment relationship is terminated. Normally, when someone switches jobs, their old employer compensates them for unused vacation days during that year, in proportion to the time of the year – so the new employer can start with a clean slate. If the employee has extra days accumulated, they must be compensated at this time, without a limitation period. If the employer failed to assign them days off in previous years, they must be paid for now.

Keep track of your employees’ vacation days

Since it is your responsibility as the employer to assign vacation days, make sure to keep track of when your employees are taking their paid leave, and remind them to use all the days available to them. An HR specialist can help you create simple and straightforward guidelines for managing vacation days at your company, while the payroll software your accountant uses can easily calculate available days.

Work with the right HR and payroll specialists, follow their guidance, and focus on what you are good at: growing your business. The accounting services offered by Helpers Finance also include payroll calculations and administration for your employees. Ask for a consultation today: fill in our form, send an email, or call our office on +36 1 215 0712.

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