Is holiday pay due on commission?
Yes. Commission is salary and counts in the holiday calculation. How depends on whether the rep takes paid holiday or receives holiday allowance:
- Paid holiday + 1% holiday supplement: salaried employees and others on monthly pay with pay during sickness and public holidays, under the Danish Holiday Act, sections 16-17.
- Holiday allowance of 12.5%: everyone else, for example hourly-paid staff, calculated on holiday-qualifying pay.
Commission-paid salaried employees
A salaried employee takes paid holiday. Under section 17(1) of the Holiday Act, an employee paid by commission is entitled to compensation for commission lost because of the holiday.
The compensation is 12.5% of commission earned. But it is not automatic: the employee has to show a real loss. In a case from the Copenhagen City Court, April 2024, a rep lost because she could plan her sales around her holiday.
Is there a loss? Three questions
| Question | Points to a loss | Points to no loss |
|---|---|---|
| Does the rep earn commission on indirect orders during holiday? | No | Yes, e.g. residual commission or orders that land anyway |
| Can the rep plan sales around the holiday? | No, orders are lost | Yes, e.g. long sales cycles that can be shifted |
| How large a share of pay is commission? | A significant share | An insignificant share |
The criteria are assessed case by case and independently. They come from Supreme Court practice, as described by the Danish Chamber of Commerce in its write-up of the case.
Example
A rep earns DKK 30,000 a month in base salary and earned DKK 180,000 in commission in the accrual year. She can document that orders are lost when she is away.
| Item | Amount |
|---|---|
| Pay during holiday (base salary) | Paid as normal |
| Compensation for lost commission (12.5% of DKK 180,000) | DKK 22,500 |
If the rep cannot show a loss, the commission already counts as holiday pay and nothing more is owed.
How to avoid disputes
- Describe how holiday is handled in the commission agreement.
- Keep commission data per month, so a loss can be documented or rejected.
- Assess each commission-paid employee individually. Roles differ.
Holiday and commission in Prowi
Prowi stores all commission earned per rep and period, so the numbers are ready when holiday pay is settled, and sends them on to payroll.
Prowi is not a law firm. This page describes the general Danish rules; collective agreements and individual contracts can give other rights. Talk to your employers' association or a lawyer when money is at stake.
In Prowi
Every term on this page is a rule you can write into a commission model in Prowi. The model reads the deal from HubSpot the second it closes, applies the rule, and the rep sees the result on their phone before the day is over.