Urlaubsabgeltung (leave payout) in Germany requires employers to pay out unused annual leave upon termination of employment, calculated based on the employee’s regular salary.

Key Takeaways

  • Unused leave must be paid out upon termination
  • Calculated based on regular salary (including overtime)
  • No time limit for claiming payout
  • Applies to all forms of employment termination
  • Cannot be waived by employee agreement

What Is Urlaubsabgeltung?

Urlaubsabgeltung is the financial compensation for unused annual leave that employers must pay to employees upon termination of employment. It is a mandatory right under German law.

Key Provisions

  • Section 7(4) BUrlG: Payout upon termination
  • Section 13 BUrlG: Payment amount
  • BAG case law: Detailed calculation methods
  • European Court: Ensuring actual leave taking

Entitlement

  • All unused leave must be paid out
  • No cap on number of days
  • No time limit for claiming
  • Applies to all termination types
  • Cannot be waived by employee

Calculation Method

  • Regular salary basis
  • Overtime included if regular
  • Special payments pro-rated (13th month, bonuses)
  • Shift premiums included
  • Average calculation for variable pay

Calculation Examples

Example 1: Standard Employee

  • Salary: €4,000 per month
  • Unused leave: 10 days
  • Daily rate: €4,000 ÷ 22 working days = €181.82
  • Payout: 10 × €181.82 = €1,818.20

Example 2: Employee with Overtime

  • Salary: €4,000 per month + €500 overtime
  • Basis: €4,500 per month
  • Unused leave: 15 days
  • Daily rate: €4,500 ÷ 22 = €204.55
  • Payout: 15 × €204.55 = €3,068.18

Example 3: Employee with Special Payments

  • Salary: €4,000 per month + €8,000 annual bonus
  • Monthly basis: €4,000 + (€8,000 ÷ 12) = €4,666.67
  • Unused leave: 20 days
  • Daily rate: €4,666.67 ÷ 22 = €212.12
  • Payout: 20 × €212.12 = €4,242.42

Employer Obligations

Upon Termination

  • Calculate unused leave accurately
  • Pay out in final salary
  • Document calculation method
  • Provide breakdown to employee

Documentation

  • Leave records maintained
  • Calculation method documented
  • Payment details included in final pay
  • Employee acknowledgment obtained

Timing

  • With final salary or next regular pay date
  • No delay beyond normal payment schedule
  • Contract termination date reference
  • Notice period considerations

Common Scenarios

Scenario 1: Standard Termination

  • Situation: Employee terminated with notice
  • Unused leave: 15 days
  • Payout: Calculated and paid with final salary
  • Documentation: Provided to employee

Scenario 2: Immediate Termination

  • Situation: Employee terminated without notice
  • Unused leave: 20 days
  • Payout: Calculated and paid immediately
  • Documentation: Full breakdown provided

Scenario 3: Mutual Termination Agreement

  • **Situation:**双方 agreed to terminate
  • Unused leave: 10 days
  • Payout: Included in agreement
  • Documentation: Agreement specifies amount

Compliance Checklist

  • Leave records maintained
  • Calculation method documented
  • Final pay includes all unused leave
  • Employee receives breakdown
  • Payment made on time
  • Documentation retained
  • Tax and social security handled
  • Contract termination date noted
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