Paid leave in Luxembourg: 26 days, accrual and carry-over

In short. Every private-sector employee in Luxembourg is entitled to 26 working days of paid leave a year, a legal minimum since 1 January 2019. The right builds up month by month, at one twelfth per full month worked, with a three-month qualifying period before leave can first be taken in year one. Untaken days are, in principle, lost on 31 December, unless carried over to 31 March of the following year, or beyond in the event of illness. While on leave, the employee keeps an allowance equal to their average salary over the last three months. Untaken days are only paid out when the contract ends.

Paid leave looks simple until you have to settle a real case: an employee who joined mid-year, a balance left unused on 31 December, illness falling during the holidays, a departure with days still in reserve. Each of these situations has a precise rule in Luxembourg, and relying on instinct is expensive, in disputes as much as in the accounts. Here, for an SME employer, is how recreation leave works in the Grand Duchy in 2026: the number of days, how they accrue, the carry-over, how leave is paid, and what becomes of untaken days when a contract ends.

How many days of paid leave in Luxembourg?

A full-time employee is entitled to 26 working days of recreation leave per calendar year. This is a legal minimum, a matter of public order: a contract or a collective agreement can grant more, never less, and the employee cannot trade it for money, except when their contract ends. The entitlement rose from 25 to 26 days on 1 January 2019.

Leave is counted in working days, meaning every day of the week except Sundays and statutory public holidays. In practice, for an employee working five days a week, one week of holiday uses five days of their balance, so 26 days represent a little over five weeks of leave across the year. Take care not to confuse this leave with the statutory public holidays, of which there are eleven in Luxembourg: they are on top of the 26 days and are not deducted from them.

Part-time leave follows the same logic, in proportion to working time. An employee working three days a week builds the same entitlement scaled to their schedule, often expressed in hours so the count stays accurate. Some categories also receive extra days provided by law or by agreement, for example employees with a disability or certain night workers, but the common base stays at 26 days.

How does leave accrue?

The right to leave builds up gradually, at one twelfth of the annual entitlement per full month worked. On a base of 26 days, that is about 2.17 days accrued per month. An employee present all year has their 26 days; an employee hired mid-year accrues their share in proportion to the months worked.

One rule specific to the first year is worth knowing: a newly hired employee must complete an uninterrupted period of three months with the employer before they can take their first leave. They keep accruing days from the first month, but cannot book them until that qualifying period has passed. From the second year onward, this waiting period no longer applies.

Booking leave: who decides?

Leave is taken by mutual agreement. The employee asks according to their wishes, and the employer grants it, unless the needs of the business or the justified wishes of other employees stand in the way. In other words, the employer can push back a request for an organisational reason, but cannot hollow out the right or refuse systematically. Where disagreement persists, leave is in principle granted in the order requests came in, taking family constraints into account.

Leave is also continuous unless the parties agree to split it. The law provides that at least part of the leave should allow a genuine rest, the aim being to avoid a scattering into half-days that would strip leave of its purpose. For the employer, the useful reflex is to have leave booked early in the year, to avoid being left with whole balances to clear in December.

Carry-over and deadline: the 31 December trap

This is the point that causes the most confusion. Leave follows a principle of annuality: it must in principle be taken in the calendar year it is earned. Days untaken on 31 December are, by default, lost. But the law allows for carry-overs, and that is where vigilance pays off.

• Carry-over to 31 March. Where leave could not be taken within the year for reasons tied to the business, or where it was refused, it can be carried over to 31 March of the following year. After that date it is, in principle, lost.
• First year. Leave earned but not taken in the first year of service can be carried over to the following year, to allow for the three-month qualifying period.
• Illness and family leave. If the employee could not take their leave because they were unfit for work, on maternity leave or on parental leave, the carry-over is extended beyond the usual deadlines, the balance being carried over depending on the date they return.

For an employer, the practical consequence is twofold. First, there is every reason to track balances continuously rather than discover them at year-end. Second, letting days lapse through poor organisation is not without risk: an employee who could not book their leave because of the workload may ask for it to be carried over, or even paid out if the contract ends with days still in reserve.

How is leave paid?

While on leave, the employee loses no income: they receive a holiday pay allowance that replaces their salary. This allowance matches the average daily salary of the three months before the leave, including increases where they are regular, such as habitual overtime or certain recurring bonuses. Non-periodic gratifications and bonuses, exceptional by nature, do not count toward the calculation.

On the payslip, leave therefore does not show up as a line taken away: the month's salary is maintained, and the gross-to-net mechanism stays the same as usual, social contributions and income tax withheld at source included. We set out that mechanism, line by line, in our article on understanding your Luxembourg payslip: from gross to net.

If the employee falls ill during their leave

The situation is common and the rule favours the employee. An employee who falls ill during their leave does not lose the days concerned, provided they meet their obligations: notifying the employer and sending a medical certificate within the deadlines. The days covered by the certificate are then reclassified as sick leave, and the matching leave is credited back to the balance to be taken later. The employer cannot count days covered by a duly justified sick note as holiday.

Untaken leave when the contract ends

This is the only case where untaken leave is paid. When a contract ends during the year, the employee is entitled to a compensatory allowance for leave earned and not yet taken. The calculation follows the accrual rule: the employee is entitled to one twelfth of their annual leave per full month worked, any part-month of more than fifteen days counting as a full month.

In concrete terms, an employee leaving at the end of September after a full year, having booked ten days of the twenty earned by that date, is paid out the remaining ten days. The reverse also happens: an employee who has taken more days than they had accrued at the point of departure has received an advance, which the employer can in principle recover. Either way, it is the real balance at the contract end date that counts, which is why a leave counter kept cleanly all year matters, rather than one reconstructed in a rush at the final settlement.

The accounting reflex people forget: provisioning for leave

Here is the angle payroll spreadsheets ignore and the accounts do not. The leave days earned by your employees and not yet taken at the closing date are a liability of the company: work already done that opens a right to paid rest later. In sound accounting, this liability becomes a provision for leave payable, set at the close of the financial year, employer social charges included.

The stake is not theoretical. A company that fails to provision its untaken leave overstates its result for the year and understates its commitments: the day employees clear their leave, or leave with a compensatory allowance, the charge lands without having been anticipated. Keeping payroll and accounting in the same tool, as we do in the Odoo where your books live, makes this provision consistent with the real leave counters, month after month, rather than estimated roughly at year-end.

How we handle leave at Advena

Payroll is part of our fixed fee, from 325 € per month, all in. For leave, that means in practice that we keep each employee's counter, calculate the holiday pay allowance on the right base, credit days back in the event of justified illness, and provision untaken leave at the close, charges included, directly in the accounts we keep for you. You see your leave commitment in your real-time position, alongside everything else, not in an isolated file discovered at the close.

Let us be straight: we inform on the leave rules and we handle their translation into payroll and accounting. On an individual dispute, such as a contested leave refusal or a tricky reclassification, the right contact remains an employment-law adviser, and we will say so rather than decide in your place. The detail of the coupling between the management system and the bookkeeping is in our guide to accounting firms for an SME, with the price in our article on what an accounting firm costs.

Frequently asked questions

How many days of paid leave a year in Luxembourg?

The legal minimum is 26 working days of recreation leave per calendar year for a full-time employee, since 1 January 2019. A contract or a collective agreement can grant more. The eleven statutory public holidays are on top of these 26 days.

How is the leave entitlement calculated mid-year?

The right accrues at one twelfth of the annual leave per full month worked, about 2.17 days a month on a base of 26 days. An employee hired mid-year accrues their share in proportion to the months worked, and must have three months' service before booking their first leave.

Can leave be carried over to the following year in Luxembourg?

In principle, leave untaken on 31 December is lost. A carry-over to 31 March of the following year is possible where leave could not be taken for business reasons or was refused. In the event of illness, maternity or parental leave, the carry-over is extended beyond that date.

Does an employee who falls ill during leave lose those days?

No. If they notify the employer and send a medical certificate within the deadlines, the days covered by the sick note are reclassified as sick leave and credited back to the leave balance, to be taken later. The employer cannot count them as holiday.

Is untaken leave paid out when the contract ends?

Yes. When the contract ends, the employee receives a compensatory allowance for leave earned and not taken, calculated at one twelfth of the annual leave per full month worked, any part-month over fifteen days counting as a month. It is the only case where untaken leave is paid rather than taken.

Read next

• Understanding your Luxembourg payslip: from gross to net
• What an employee really costs in Luxembourg in 2026
• Hiring your first employee in Luxembourg: the steps
• The year-end bonus in Luxembourg: 13th month, gratification and what employers need to know
• Accounting firm in Luxembourg: the complete guide for an SME

Why Advena?

We keep the books and run the payroll of Luxembourg SMEs of 1 to 50 employees inside the management system we deploy ourselves, on a fixed fee from 325 € per month, all in, with no hourly billing. Leave counters, the holiday pay allowance and the provision for untaken days at the close feed straight into the Odoo where we keep your books, so your leave commitment is legible all year and not discovered at the close. We inform on the rules; we do not replace tailored advice on an individual situation.

Information current as at October 2026, based on the recreation leave rules of the Labour Code (articles L.233-1 and following) as presented by the Inspectorate of Labour and Mines and by Guichet.lu. The increase to 26 days stems from the law of 25 April 2019. As these rules are subject to revision and each situation is specific, this article is for information and does not constitute tailored legal, tax or social security advice.