Can unused annual-leave days be paid out in cash?
Quick answer
- No, unused leave days cannot be paid in cash while the contract is still active.
- Annual leave must be taken in kind, as time off, not converted into money.
- Unused days may be carried over and granted within the next 18 months.
- Cash compensation is allowed ONLY upon termination of the employment contract.
- On termination, all remaining unused leave days are paid out.
What the law says
- Art. 146 Labour Code: annual leave is taken in kind, each year.
- Cash compensation is permitted only upon termination of the individual employment contract.
- Unused leave is granted within the next 18 months for a justified reason.
- The employer must actually grant the leave in the year the right arises.
- Compensatory pay on termination covers all remaining unused days.
Practical examples
- Example: an employee with 7 unused days at year-end cannot get them in cash while still employed.
- Example: the 7 days are carried over and must be granted within the next 18 months.
- Example: on resignation with 7 days left, the employer pays compensatory pay for all 7.
- Example: at a daily average of 285 lei, compensating the 7 days on termination is ≈ 1,995 lei.
Common mistakes
- Paying unused leave in cash during the contract instead of actually granting it.
- Losing unused days at year-end, with no carry-over within 18 months.
- Not paying compensation for the days remaining at termination.
- Forcing the employee to give up leave for a sum of money, which is unlawful.
How 4softhr helps
- 4softhr keeps the exact unused-day balance and blocks cash compensation during the contract.
- It marks carried-over days and tracks the 18-month deadline for actually granting them.
- It automatically computes the compensatory pay for days remaining at termination.
- It alerts managers about days that must be taken before the carry-over expires.
- It syncs the leave balance with final settlement and payroll in the 4b2b ecosystem.