Annual leave when joining or leaving a company mid-year: how many days are employees entitled to?

Table of contents

• What determines annual leave entitlement?
• What is pro-rata annual leave?
• How does age affect annual leave entitlement?
• What happens when an employee joins during the year?
• How is leave calculated when employment ends?
• What happens to unused annual leave?
• Does additional leave also need to be calculated pro rata?
• Why use an annual leave calculator?
• Summary
• FAQ – Frequently Asked Questions

What determines annual leave entitlement?

Employees’ rights in Hungary are set out in the Hungarian Labour Code, making it one of the most reliable sources for understanding the rules governing annual leave. Under these rules, every employee is entitled to annual leave, consisting of basic annual leave and additional leave. The basic entitlement is 20 working days per year, supplemented by extra days as employees grow older. Additional leave depends on the employee’s individual circumstances and various life situations.

Additional leave may be granted, for example, for children, reduced working capacity or certain special types of work. Although the basic entitlement is clearly defined, there is no single fixed number of leave days that applies to everyone: the annual entitlement depends on each employee’s circumstances. Calculating leave is relatively straightforward when employment lasts for the full year. If an employee starts a new job during the year, however, the question becomes how much leave they are entitled to on a pro-rata basis and how to calculate it.

What is pro-rata annual leave?

Experienced employees are likely familiar with pro-rata annual leave. In essence, when an employment relationship does not cover the entire calendar year, the employee is entitled to a proportionate share of their annual leave allowance. For example, if an employee has an annual entitlement of 20–30 days of leave, the timing of when leave is taken is not the same as calculating the pro-rata entitlement. It is important to distinguish between entitlement to leave and the scheduling of leave: if employment continues throughout the year, there is no general statutory prohibition on granting even the entire annual leave allowance in February. Within the legal framework, the employer determines when leave is taken.

Pro-rata calculations are therefore relevant to employees who change jobs or leave an employer during the year. In these cases, they are entitled to a proportionate share of the annual allowance rather than the full amount. The Hungarian Labour Code clearly regulates this situation. The calculation itself is not necessarily complicated: divide the employee’s total annual leave entitlement by the number of calendar days in the year, then multiply the result by the number of calendar days during which the employment relationship exists. Another important rule is that a fractional day of at least half a day must be rounded up to a full working day.

How does age affect annual leave entitlement?

Since the starting point for calculating pro-rata leave is the total number of days due for the year, we must also take account of additional leave based on age. This provision grants extra days at certain ages. Employees become entitled to age-related additional leave from the age of 25, with the allowance increasing gradually. The highest entitlement is reached from the age of 45, when basic leave and age-related additional leave together amount to 30 working days a year. The additional days already apply in the calendar year in which the employee reaches the relevant age.

It therefore makes no difference whether an employee’s birthday falls in January or November: the extra days apply for the year in which they reach the qualifying age. This must also be taken into account when calculating pro-rata annual leave. An annual entitlement of 20 days rather than 30 days can make a substantial difference to the calculation. As a result, two employees who join the same company on the same date may have different pro-rata leave entitlements if they belong to different age groups.

What happens when an employee joins during the year?

When a new employment relationship begins, annual leave must be calculated proportionately from the employee’s start date. Suppose a 35-year-old employee starts work on 1 July. Based on their age, they are entitled to 25 days of annual leave for a full year. As they work during the second half of the year, they are entitled to approximately half of this allowance, or 13 working days. If the employee also qualifies for additional leave for children, those days must first be added to the full annual entitlement, and the resulting total must then be calculated pro rata. Although the calculation may seem complicated at first, knowing the key details and calculation rules makes it possible to plan leave in advance.

How is leave calculated when employment ends?

Pro-rata annual leave is relevant not only when someone starts a job mid-year but also when employment ends. Under the applicable rules, the employer must either grant any remaining leave before the employment relationship ends, which may include the notice period, or pay compensation for unused leave based on the employee’s absence pay. What does this mean in practice? Consider a 40-year-old employee with an annual leave entitlement of 27 days. If their employment ends on 31 August, their pro-rata entitlement up to that date is 18 days.

In practice, the employer compares the leave already taken with the amount to which the employee is entitled on a pro-rata basis. If fewer days have been taken than are due, the remaining leave must either be granted before the employment relationship ends or paid out when it terminates. However, if the employee has taken more leave than their pro-rata entitlement at the date of departure, the employer may not unilaterally deduct the amount paid for those extra days from the employee’s wages and, as a general rule, cannot recover it through court proceedings solely because the pro-rata allowance was exceeded. Any such deduction requires the employee’s written consent given upon leaving.

What happens to unused annual leave?

When an employee leaves during the year, an important question is what happens to annual leave they are entitled to but have not yet taken. During employment, the employer determines the scheduling of leave in accordance with statutory rules. If the pro-rata leave entitlement has not been fully granted by the time employment ends, the remaining days must be paid out based on the employee’s absence pay. Like wages, payment in lieu of unused annual leave is subject to applicable taxes and social security contributions.

Before an employee leaves, it is therefore worth checking both the pro-rata leave entitlement and the number of days already taken. These figures are available in leave records and payroll data. If there is still time to grant leave before the employment relationship ends, the employer may determine when it is taken within the statutory framework; any remaining unused leave must be paid out upon termination.

Does additional leave also need to be calculated pro rata?

So far, we have discussed basic annual leave and age-related entitlements, but other types of additional leave also play a role in the calculation. Pro-rata calculation applies to these as well. This is particularly important for additional leave for children, the age-related extra days already mentioned and other special entitlements. For example, the full annual entitlement of a 38-year-old employee with two children is determined by adding together basic annual leave, age-related additional leave and additional leave for children. If their employment lasts for only part of the year, that combined annual entitlement must then be calculated pro rata. This is why calculating annual leave correctly can be more complex than it first appears.

Why use an annual leave calculator?

The points above illustrate why determining the exact number of leave days can sometimes be difficult, especially when a pro-rata calculation is required. Payroll and HR administration teams can provide useful, up-to-date information, but employees starting a new job may also want to check their entitlement themselves. Our modern, intuitive annual leave calculator can help: by answering a few simple questions, users can determine the number of days of leave they are entitled to for the year. The calculator makes life easier for employees and HR professionals alike, providing useful figures and information quickly without lengthy research. Whether employment lasts the full year or begins or ends partway through it, the annual leave calculator offers a simple way to obtain a quick result.

Summary

If employment does not cover the entire calendar year, the employee is entitled to a pro-rata share of their annual leave. The calculation always starts with the total annual entitlement, made up of basic annual leave and the various types of additional leave. Age-related extra days, additional leave for children and other entitlements are included in the annual allowance just as they would be for a full year of employment. An annual leave calculator can help determine the exact entitlement, especially when someone joins or leaves during the year.

FAQ – Frequently Asked Questions