Can unused annual-leave days be paid out in cash?

Quick answer

  1. No, unused leave days cannot be paid in cash while the contract is still active.
  2. Annual leave must be taken in kind, as time off, not converted into money.
  3. Unused days may be carried over and granted within the next 18 months.
  4. Cash compensation is allowed ONLY upon termination of the employment contract.
  5. 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.
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