Vacation Calculation in the Czech Republic: Why is vacation included in the Labour Code and what exactly is it?

The information in this article applies only to the Czech Republic.

Vacation is one of the key tools for protecting employees’ health and promoting work-life balance. It is enshrined in the Labour Code (Act No. 262/2006 Coll.) as a legal right of every employee.

What is vacation?

Vacation is paid time off that serves for employees to rest, recover and prevent work overload.

The Labour Code 262/2006 Coll. defines the rules for how vacation is granted and in what amount, ensuring fairness and equality among employees.

Main purposes of vacation:

1. Regeneration of employees’ physical and mental strength
2. Health promotion and burnout prevention
3. Balancing work commitments and personal life

Historical background

The inclusion of vacation in labour law regulations stems from the workers’ rights movement that began in the 19th century. With industrialization, both employers and governments started to recognize that:

• Overworked employees are less productive
• Insufficient rest leads to health issues and increased absenteeism
• A high-quality workforce depends on proper rest

Why is vacation part of the Labour Code?

The reason vacation is embedded in the Labour Code is to protect employees’ rights. Without a legal framework, vacation could be left entirely up to the employer’s discretion, potentially leading to inequality and exploitation.

Key principles of statutory vacation rules:

• Employer’s duty: Ensure employees have enough time for rest and recreation
• Employee’s right: The right to vacation is an inherent part of employment
• Minimum standards: The Labour Code guarantees a minimum of 4 weeks of vacation and clearly defines how it is calculated and taken

Overview of key rules

Since 2021, there has been a significant change in how vacation is calculated. Vacation days were replaced by hours, introducing a more accurate system for calculating entitlements and compensation.

However, this has posed challenges for HR professionals and payroll accountants, and raised many questions among employees regarding compensation and payslip information.

That’s why we’ve prepared a guide outlining the basic rules to help you better understand how vacation is calculated and what you’re entitled to under a standard employment contract or agreements outside of employment (DPP and DPČ).

Vacation specifics

The use of vacation is determined by the employer, who must take into account the legitimate needs of the employee. The employee can request vacation, but it is ultimately up to the employer to approve it.

If requested, vacation should be granted in one block, with at least 2 consecutive weeks.

Basic vacation entitlement

Every employee in a standard employment contract (HPP) is entitled to vacation if they meet the following conditions:

• Duration of employment: Must be employed by the same employer for at least 4 weeks
• Hours worked: Vacation entitlement accrues for every 52 hours worked (1 work week)

Minimum vacation length

• 4 weeks per calendar year (legal minimum)
• Public sector employees: 5 weeks
• Teachers and academic staff at universities: 8 weeks

Vacation calculation based on hours

Since 2021, vacation has been calculated using an hourly system, which is fairer for employees working different shift lengths.

Formula:

Weekly working hours × number of vacation weeks = annual vacation entitlement in hours

Example for full-time (40 hours/week):

• 4 weeks: 40 × 4 = 160 hours/year
• 5 weeks: 40 × 5 = 200 hours/year

If an employee does not work the full year, their vacation entitlement is proportionally reduced based on hours worked.

Example:

Full-time employee (40 hours/week), entitled to 4 weeks:
→ 40 × 4 = 160 hours/year

Special cases and calculation

Proportional vacation

If the employment lasts only part of the year, the employee is entitled to a proportional part of the vacation:

For every month worked, the employee is entitled to 1/12 of the annual vacation.

Example: Employee worked 3 months in a year with a 160-hour annual entitlement:
→ 160 / 12 × 3 = 40 hours of vacation

Illness, caregiving

Vacation typically continues to accrue during these periods, up to a certain limit.

Partial year

Vacation entitlement is proportional to the length of the employment.

Short-term employment

Vacation is calculated for every 52 hours worked.

Example for short-term job:

Employee starts in October full-time (40 hours/week), entitled to 160 hours/year. Works for 6 weeks:
→ (160 / 52) × 6 = 18.46 hours of vacation

Conclusion

Vacation calculation doesn’t have to be complicated if you understand the basic principles and have the right information. A thorough calculation ensures you can fully use your vacation entitlement.

Vacation calculation for DPP and DPČ: A detailed look

Major changes in 2024

As of 2024, there have been significant changes regarding vacation entitlements for employees working under agreements to perform work (DPP) and agreements to complete a job (DPČ). These changes aim to ensure a fairer approach to vacation entitlements for people employed under these types of contracts.

Basic conditions for vacation entitlement:

• Duration of employment: Minimum of 28 days (4 weeks)
• Hours worked: At least 80 hours within the calendar year
• Fictitious weekly working time: A fixed 20-hour weekly schedule is used for calculation purposes, regardless of the actual number of hours worked

Vacation calculation

Vacation entitlement is calculated using the following formula:

Vacation hours = (Number of vacation weeks × Fictitious weekly working time × Employment fraction) / 52 weeks

Example:

An employee on a DPP contract works 100 hours per year, is entitled to 4 weeks of vacation, and their work fraction is 50% (i.e., 10 hours per week).

Vacation hours = (4 weeks × 20 hours/week × 0.5) / 52 weeks = 7.69 hours

Rounding

The result is rounded up to the nearest whole hour.
In our example, the employee would be entitled to 8 hours of vacation.

Taking vacation

• Taken in hours: Vacation is taken in hours, not in days
• Counts towards hours worked: Vacation taken is included in the total hours worked when calculating further vacation entitlement

Specifics for DPP and DPČ

• No difference between DPP and DPČ: Vacation entitlement is calculated the same way for both types of agreements
• Possibility of shorter vacation: If both the employer and employee agree, a shorter vacation than 4 weeks may be set
• Alternative vacation amount: The employer may set a different vacation length than 4 weeks, but only if objectively justified

Other important points

• Work interruptions and vacation: If the employee is on sick leave, parental leave, etc., vacation entitlement may be reduced if the interruption lasts more than 100 working days
• Unused vacation: If vacation is not taken in the given year, it is carried over to the following year. However, the employer must schedule its use
• Agreements (DPP/DPČ): Employees working under DPP or DPČ are not entitled to vacation unless explicitly agreed in the contract

Most common mistakes in vacation calculation

• Converting hours to days: Employees often confuse hours with days, which can lead to miscalculations
• Overlooking short absences: Illness, caregiving, and other absences can affect vacation calculations
• Ignoring changes in working hours: If your working hours change during the year, the vacation entitlement must be recalculated

Practical tips

• Use vacation calculators: Many companies and online tools offer calculators to help you with the math
• Consult your HR department: If you’re unsure, ask your HR specialist for help
• Document your calculation: Keep records of your vacation calculations in case of future audits or disputes