Annual leave accrual: the 14-day and 35-hour rules and holiday liability

Annual leave is earned one month at a time: every full holiday credit month produces two or two and a half working days of leave. The decision is therefore made calendar month by calendar month, and it depends on two things: whether the month reaches 14 days at work or 35 hours of work, and which absence days count as time equivalent to time at work. The Annual Holidays Act (162/2005) also states when earned leave must be granted and what must be recorded about it.

Accrual period (holiday credit year) and holiday season

The accrual period runs from 1 April to 31 March. Normally, 24 weekdays are granted during the holiday season of 2 May–30 September and the rest as winter holiday before the next season. If entitlement is below 24 days, all of it is summer holiday. The Act also permits agreements on other timing; accrued holiday does not always have to wait until the next calendar year.

The length of leave is measured in working days. Under section 4 of the Annual Holidays Act, working days are the days of the week other than Sundays, church holidays, Independence Day, Christmas Eve, Midsummer Eve, Easter Saturday and May Day, so Saturday is a leave day. Six working days of leave equal one calendar week, and 24 working days equal four weeks.

A full holiday credit month is decided by the 14-day or 35-hour rule

Under section 6, a full holiday credit month is a calendar month during which the employee has accrued at least 14 days at work or days equivalent to time at work as referred to in section 7, subsections 1 and 2. This is the main rule.

The second rule applies to an employee who, under their contract, works on so few days that for this reason they have no calendar month at all containing 14 days at work, or only some calendar months contain 14 days at work. For them, a full holiday credit month is a calendar month during which at least 35 hours of work or hours equivalent to time at work as referred to in section 7 have accrued.

The accrual rule follows the agreed working arrangement; it is not switched monthly to maximise entitlement. A lasting change, such as moving from full-time to part-time work on fewer days, can also change the applicable rule. Record the effective date.

The accrual is two or two and a half working days per month

Under section 5, a full holiday credit month earns two and a half working days of leave. The accrual is two working days if, by the end of the accrual period, the employment relationship has continued without interruption for less than one year. The threshold is assessed on the last day of the accrual period, not month by month: for the whole year the accrual is either two or two and a half working days per month.

The total is rounded: a fraction of a day is rounded up to a whole leave day. Eleven full months at two and a half days give 27.5 days, which rounds to 28 leave days.

Time equivalent to time at work keeps accrual running during an absence

Under section 7, time equivalent to time at work means time absent from work for which the employer is required by law to pay wages. This also covers annual leave, for which holiday pay is paid. The section further lists the working days and working hours on which the employee is prevented from working. The most common of these and their maximum amounts:

Study leave days count as time equivalent to time at work on condition that the employee returns to work immediately after the study leave. Attending training required by the work is time equivalent to time at work when the training takes place with the employer’s consent (section 7, point 6). The same applies to reservist training, holding a public office of trust and being heard as a witness, and to absence due to an order issued by an authority to prevent the spread of a disease. A shortening of working weeks corresponding to a lay-off is counted for a maximum of six months at a time.

Separately agreed unpaid leave does not normally accrue holiday unless a collective agreement or other agreement provides otherwise. Being unpaid is not decisive: statutory family and study leave can count as time equivalent to work within legal limits. For long sickness or rehabilitation absence, also check entitlement to additional days off supplementing annual holiday (section 7a).

An employee working fewer than 14 days and fewer than 35 hours has a right to leave

If the employee’s agreed work is too limited to produce full holiday credit months under either accrual rule, section 8 gives them the right to request two weekdays off for each month of employment. This leave and its holiday compensation are distinct from ordinary annual holiday accrual.

The monetary side is handled by the holiday compensation under section 16: it is 9 per cent or, if the employment relationship has continued for at least one year by the end of the accrual period preceding the holiday season, 11.5 per cent of the wages paid for time at work during the accrual period. The premium portions for emergency work and overtime are excluded from the calculation.

Summer leave is placed in the holiday season, winter leave after it

Under section 20, annual leave is granted at a time determined by the employer unless the timing is agreed as referred to in section 21. Of the leave, 24 working days must be placed in the holiday season; this part is the summer leave. The remaining part, the winter leave, must be granted no later than the start of the next holiday season.

Summer leave and winter leave are granted without interruption. Splitting is possible to a limited extent by the employer’s decision: the part of the summer leave exceeding 12 working days may be granted in one or more parts if this is necessary to keep the work going. In seasonal work, summer leave may be granted outside the holiday season during the same calendar year if granting it within the holiday season would cause substantial difficulties for the employer’s operations.

By agreement there is more room to move. Under section 21, the employer and the employee may agree that the part of the leave exceeding 12 working days is taken in one or more periods. They may agree on placing the leave in a period that begins at the start of the calendar year in which the holiday season falls and ends the following year before the holiday season begins, and on taking the part exceeding 12 working days within one year of the end of the holiday season at the latest. On the employee’s initiative it may be agreed that the part exceeding 24 working days is taken as reduced working time; this agreement is made in writing.

Consultation comes before the decision, notice before the leave

Under section 22, the employer must explain to the employees or their representatives the general principles followed in granting annual leave. Before determining the timing of the leave, the employer must give the employee an opportunity to state their view on the timing, take the proposals into account as far as possible, and observe impartiality in placing the leave.

Under section 23, the timing is notified no later than one month before the leave begins. If that is not possible, notice may be given later, but no later than two weeks before the leave begins. In practice this fixes the schedule for leave planning: notice for the leaves falling at the start of the holiday season goes out as early as the beginning of April, so the consultation must be done even earlier.

Falling ill during leave and the six-day own-liability period

If the employee is incapacitated for work at the start of their annual leave or a part of it because of childbirth, illness or an accident, the leave must be postponed to a later date at the employee’s request under section 25. If the incapacity begins only during the leave, the employee is entitled on request to have the days of incapacity exceeding six leave days postponed. The first six days are therefore an own-liability period.

Postponement must be requested without delay, and at the employer’s request the employee must provide a reliable account of their incapacity for work. There is no right to postponement if the employee has caused their incapacity intentionally or through gross negligence.

Note. The own-liability days may not reduce the employee’s right to four weeks of annual leave. If four weeks of annual leave or less has accrued, no own-liability period remains at all, and every day of incapacity is postponed to be taken later.

Saved leave moves the excess part of the leave to future years

Under section 27, the employer and the employee may agree that the part of the leave exceeding 18 days is taken during the following holiday season or later as saved leave. The employee is also entitled to save the part of their leave exceeding 24 days if this does not cause serious harm to the production and service operations of the workplace. Saving and the number of days to be saved must be negotiated no later than when the employer consults the employees on the timing of the leave under section 22.

The employee chooses when saved leave is taken: it is granted in the calendar year or calendar years they determine. If no more precise timing is agreed, the employee must give notice of taking the saved leave no later than four months before the day it begins. The four-month notice period is worth taking into account in staffing planning, because saved leave may fall in a year whose leave plan has already been made.

Annual leave records show the holiday liability in days

Under section 29, the employer must keep records of the employee’s annual leave, the supplementary days off that complete it and saved leave, as well as of the wages and compensation determined under the Act. The records must show the lengths and timing of the annual leave, the number and timing of supplementary days off, and the amounts of the wages and compensation and the grounds on which they are determined. The annual leave records must be shown on request to the person carrying out an occupational safety and health inspection and to the personnel representative, and the employee is entitled on request to a written account of their own entries. The records are kept at least until the end of the limitation period for claims laid down in section 34: while the employment continues, two years from the end of the calendar year during which the leave should have been granted or the holiday compensation paid, and after the employment has ended, two years from that ending.

Holiday records show accrued, taken and remaining days per person. A balance measured in days is different from the monetary holiday-pay liability in accounting. Calculating that liability also requires pay data and the applicable calculation rules.

A collective agreement may derogate from the rules of the Act

Section 30 of the Annual Holidays Act gives an employer or an employers’ association and a national employees’ association the right to agree otherwise on the holiday season, on the calculation and payment of holiday pay and holiday compensation, on placing the winter leave in another agreed reduction of working time, on saved leave and on the content of section 8, subsection 2. A collective agreement may also be used to agree on splitting the leave exceeding 12 working days into one or more periods, and on the time equivalent to time at work under section 7, provided that the arrangement secures for employees annual leave of a length corresponding to that laid down in this Act.

The employer may apply the provisions of a collective agreement also in the employment relationships of employees who are not bound by the agreement but in whose employment relationships the employer must observe the agreement under the Collective Agreements Act. A generally binding agreement is therefore observed in a non-organised company as well. Check the agreement for your own sector before relying on the default in the Act, especially as regards the holiday season, the splitting of leave and time equivalent to time at work.

Example: one employee’s accrual period

The employee has been employed since 2023, works five days a week and is covered by the 14-day rule. The accrual period is 1 April 2026–31 March 2027. In November they have an agreed unpaid leave and in January a sickness absence.

January stops at six days at work, but the 14 days of sickness absence are equivalent to time at work under section 7, point 2, so the month is full. Sickness days for the year total 14, clearly below the maximum of 75 days. November falls short because the agreed unpaid leave is outside accrual.

Eleven full months produce 27.5 days, which rounds to 28 leave days. Of these, 24 working days must be placed in the holiday season 2 May – 30 September2027, and the remaining 4 working days are granted as winter leave before the start of the next holiday season in spring 2028. The employee may, if they wish, save the part exceeding 24 days, that is these 4 days, as saved leave, if saving does not cause serious harm to production and service operations.

Example: the team’s remaining holiday days

The situation of a four-person team on 30 September 2026, when the holiday season has just ended. The liability consists of three items: days left untaken from the previous accrual period, days previously transferred to saved leave, and half a year of accrual from the current accrual period (1 April – 30 September).

The team has 87 remaining days from different accrual periods. Only 10 of the previous accrual period’s 28 remaining days are ordinary winter holiday: 6 for Aino and 4 for Bertil. The other 18 are unused summer holiday; check the legal basis for postponing or saving them and the deadline for granting them. Summer holiday does not become winter holiday simply because the season ends. Dan’s new accrual is reduced by two months that did not meet the 35-hour rule. Ceren’s rate rises from 2 to 2.5 days per month based on length of employment.

Holiday balances help plan upcoming leave and team workload. Keep accrual periods and saved leave separate so each entitlement is granted on time.

Checklist

• The accrual period is closed and the accrual calculated for every employee for the period 1 April – 31 March
• The accrual rule is chosen per person. The 14-day rule is the main rule; the 35-hour rule applies to an employee who, under their contract, works on so few days that 14 days are not reached, or are reached only in some months.
• The employment start date is known. It determines whether the year earns 2 or 2.5 working days a month.
• Absences are classified. Days equivalent to time at work are separated from other absences, and the maximum amounts in section 7 have been checked: 75, 160 and 30 days, and under the 35-hour rule 105, 182 and 42 calendar days.
• The accrual is rounded up to a whole leave day only from the year’s total, not month by month.
• Employees working fewer than 14 days and fewer than 35 hours have been reviewed separately. They are told about the right to leave under section 8 and that they must give notice of their wish before the holiday season begins.
• Holiday timing is checked: summer holiday normally in the holiday season, the rest before the next season. Any exception has a lawful basis.
• Splitting has a ground. Splitting the summer leave beyond 12 working days is based either on the necessity of keeping the work going or on an agreement with the employee; an agreement on reduced working time is in writing.
• The employees have been consulted and the general principles for granting leave explained before the timings are determined.
• Notice goes out one month before the leave begins, and even in exceptional situations no later than two weeks before.
• Saved leave has been negotiated as part of the consultation and the number of days to be saved is recorded.
• The collective agreement for your own sector has been read in the parts where it differs from the Act: the holiday season, the splitting of leave, time equivalent to time at work, saved leave, and the calculation of holiday pay and holiday compensation.
• Holiday records are up to date, and a person’s remaining days can be found with one search.