Paid annual leave and severance pay are among the most common topics between employer and employee — and a common source of payroll errors.
In this manual, an accounting firm Rodi Consult (Varna) explains the amount, order of use, statute of limitations, and how exactly compensation for unused vacation is calculated — updated for 2026.
In short: the minimum paid annual leave is 20 working days (26 days for persons with permanently reduced working capacity 50%+ and for minors). The right is exercised after 4 months of work experience, is declared in writing and is extinguished by statute of limitations 2 years after the end of the year for which it is due. Upon termination of the contract, it is due compensation under Art. 224 of the Civil Code for unused leave.
What is the amount of paid annual leave?
Every worker or employee under an employment relationship has the right to at least 20 working days paid annual leave for each calendar year. This is the minimum under the Labor Code - the parties can agree on more in the employment contract or collective labor agreement.
Extended leave from 26 working days is applied to:
- persons with 50% and above 50% permanently reduced working capacity;
- workers and employees, under 18 years old — including the year in which they reach the age of majority.
When does the right to leave arise?
When first starting work, the right to use on leave occurs only after the person acquires 4 months of work experience. It does not matter whether this experience is accumulated with one or several employers, all at once or in parts - once acquired, it entitles the employee to leave for the entire working life. The employer may, however, at its discretion, grant leave before the expiration of the 4 months.
Order for using leave
The leave is taken all at once or in parts, after written statement by the employee (leave request) and written permission by the employer. Without such permission, the employee is generally not entitled to go on leave.
The employer may grant leave without consent the employee in several cases:
- for stays of more than 5 working days;
- when leave is taken simultaneously by everyone in the enterprise;
- when the employee has not requested their leave by the end of the year despite a written invitation from the employer.
The employer is obliged to allow employees of a religion other than the Eastern Orthodox faith, at their request, part of their leave for the days of the relevant religious holidays.
How are vacation days calculated?
The vacation is proportional to the credited work experience for the year. The calculation assumes that the employee will work until the end of the calendar year.
Example: An employee with 20 days of annual leave, without accrued leave from previous years, as of 27.09 has a recognized length of service of 270 calendar days. The calculation is: 270 / 365 × 20 = 14.79 → 15 business days leave is due on that date. If the employer allows, the leave can also be used in advance - and if the contract is terminated earlier, the employee does not owe refund of days used in advance.
Vacation statute of limitations
The right to paid annual leave is expires after 2 years after the end of the calendar year for which it is due. Thus, the leave for 2024 must be used by the end of 2026. No compensation is due upon termination for leave with an expired statute of limitations. However, the statute of limitations stops flowing during maternity and some other leaves, so those days are not wasted.
Compensation for unused leave
Upon termination of the employment relationship, the employer must: monetary compensation under Art. 224 of the Civil Code for unused leave - for the current year until the date of termination plus unused leave from previous years, the statute of limitations of which has not expired.
The size is determined in the order of Art. 177: the basis is the gross remuneration for the last calendar month during which the employee worked at least 10 working days. Compensation = unused days × average daily gross remuneration for that base month.
Example: employee leaves with 8 days of unused leave. The base month is with gross salary 1 500 € and 23 calendar working days. Average daily gross = 1,500 / 23 = 65,22 €. Compensation = 8 × 65.22 = 521,74 €.
Important: monetary compensation for unused leave is prohibited, except upon termination of the contract. Compensation is also due to employees without 4 months of experience, as long as they have at least 1 full month of experience with the employer.
How we help
Correct management of leave, payroll and benefits is part of our service Payroll & HR. If you have a question about a specific case, contact us or on +359 893 474 576.
See also related topics: conclusion of an employment contract и probationary period.
FAQ
How many days of paid annual leave are legally entitled to?
The minimum amount is 20 working days per year. For persons with 50% and over 50% permanently reduced working capacity, as well as for minors, the leave is 26 working days. The parties may agree on a larger amount in the employment contract.
After how long does the right to leave arise?
The right to use arises after acquiring 4 months of work experience. This experience is acquired once in a lifetime and may be accumulated with one or several employers, all at once or in parts.
How long does unused leave expire?
The right to use expires 2 years after the end of the calendar year for which the leave is granted. The limitation period stops running during maternity and certain other leaves.
How is compensation for unused leave calculated?
Under Art. 224 and Art. 177 of the Labor Code: unused days are multiplied by the average daily gross salary for the last calendar month during which the employee worked at least 10 working days.
Does the employee owe compensation if he has used more leave than he is entitled to?
No. If, on the date of termination, the employee has used more days in advance than he is entitled to in relation to the time worked, he does not owe compensation to the employer.
The material is of an informative nature and does not replace individual consultation with an accountant or lawyer.
