Holiday pay (feriepenger) is wages you earned the previous year, and it replaces your normal salary while you are on holiday. It should normally be paid on the last payday before the holiday – often as a lump sum in June – and amounts to at least 10.2 percent of last year's pay. Here are answers to the most common questions.

When is my holiday pay paid out?

Under section 11 of the Holiday Act (ferieloven), holiday pay must be paid on the last ordinary payday before the holiday, unless something else is agreed. If you split your holiday into several periods or days, the holiday pay is divided accordingly.

In practice, most businesses have agreed to pay holiday pay in a fixed month, usually June. You then receive the holiday pay as a lump sum, while your salary for the holiday weeks themselves is deducted. If you want to understand why your June pay looks different from usual, see our separate guide to holiday pay and leave.

How do I find out how much I will get?

Holiday pay is calculated from the holiday pay basis – everything you received as work remuneration (salary and similar) during the accrual year, that is, the previous year. The basis is shown on the annual statement you receive from your employer.

The rate is at least 10.2 percent of the holiday pay basis. If your workplace has a collective agreement or a contractual five-week holiday, the rate is normally 12 percent. If you are over 60, the rate is 2.3 percentage points higher – that is 12.5 percent, or 14.3 percent with a five-week holiday.

If you are unsure whether the payment is correct, ask the payroll officer or your union representative for a breakdown you can check the figures against. The Labour Inspection Authority cannot rule on whether the calculation itself is correct.

I am new in the job – will I get paid in June?

If you started a new job earlier this year and the company pays out holiday pay in June, you may find that you receive neither ordinary salary nor holiday pay that month. That is correct: holiday is unpaid time off, and it is the holiday pay you earned last year that is meant to cover your income while you are off.

If you come from another employer, it is the holiday pay from there that covers your holiday this year. You either received it when you left, or you get it from your previous employer now in June. If you were not working last year, you still have the right to take holiday, but not the right to holiday pay. Check what your employment contract says about pay and holiday.

I was on sick leave – does that affect my holiday pay?

You also accrue holiday pay during part of a sickness absence. The employer pays sick pay for the first 16 days (the employer period), and holiday pay must be calculated for this period too. After the employer period, the National Insurance scheme, through NAV, pays holiday pay for up to 48 days of sick leave each accrual year.

If the employer advances your salary during sick leave, the agreement or collective agreement decides whether holiday pay is paid as normal. You can read more about your rights when ill in the guide to sick leave in Norway.

I do not have full accrual – must I take a full holiday?

No. The Holiday Act lets you waive holiday time off if the holiday pay does not cover your loss of income during the holiday. This is your choice, not something the employer can require. If you do not have full accrual from the previous year, you have three options:

  • Take the full holiday anyway. You will then be deducted salary for the whole holiday, and you will find that last year's holiday pay does not cover the full deduction.
  • Take only the part of the holiday covered by the holiday pay you earned last year, and decline the rest.
  • Combine: take the covered part plus some extra holiday without full cover – for example two weeks covered by holiday pay and one week without.

If the business shuts down operations, for example with a collective holiday of three weeks in summer, you must still take holiday even if you have not earned enough holiday pay to cover the loss of income.

Can I get holiday pay in advance?

No. Holiday pay is not a savings scheme or an extra payment you get on top of your salary, nor is it something the employer deducts from your pay. It is an amount the employer sets aside the year before to replace your salary when you take holiday. The purpose is to secure your financial ability to take time off.

Holiday pay is paid in direct connection with taking holiday or when you end an employment relationship. If you leave a job, you should keep the holiday pay you receive, so that you have money during your holiday with a new employer the following year.

Do I pay tax on holiday pay?

Holiday pay is taxable income, but tax is usually not deducted when it is paid out (often in June). The reason is that your tax deduction card already spreads the tax across the rest of the year's salary, so the deduction is lower in June and higher in the other months. If you have large holiday pay and little other salary, it can be worth checking your tax deduction card to avoid a tax bill (baksmell).

If you do not find the answer to what you are wondering about, you can read more about holiday pay at the Labour Inspection Authority and NAV. If you are in doubt about your own payment, contact the payroll officer or union representative at your workplace.