Every month, employed workers receive their payslip, yet how many of them truly know how to interpret the entries relating to residual holiday and leave entitlements? Understanding this data is not merely a matter of curiosity: it is a right protected by law and an essential tool for verifying that one's employer is correctly applying the applicable collective bargaining agreement. In this article, the professionals at LexGo guide you step by step through reading these entries, with particular attention to the most recent regulatory developments.
Why the Payslip Must Show Holiday and Leave Entitlements
Law No. 4 of 5 January 1953 requires all employers to provide their employees, at the time of payment of remuneration, with a pay statement — the so-called cedolino — containing the principal economic and regulatory information relating to the employment relationship. Among these entries, accrued paid absences are fully included, namely holidays, leave and compensatory rest periods still available to the worker.
Knowing one's holiday balance is not only useful for planning time off: it is a concrete monitoring tool to ensure that nothing is lost and that the employer is not failing to recognise what is contractually due.
How Residual Holiday Entitlements Are Calculated on the Payslip
At the bottom of the payslip, typically in the summary section, you will find a field dedicated to residual holiday hours or days. The figure is the result of a seemingly straightforward formula, which is nonetheless worth understanding in detail:
- Residual holiday from the previous year: the balance of holiday hours or days not yet taken as at 31 December of the previous year. As a concrete example, in the April 2026 payslip this entry indicates what remained unused as at 31 December 2025.
- Holiday accrued in the current year: the hours or days accumulated from 1 January up to the last day of the payslip's reference month. This field can never carry a negative value.
- Holiday taken in the current year: the hours or days actually used during the current year. By its very nature, this field cannot assume a positive value.
The resulting formula is therefore: Residual holiday from the previous year + Holiday accrued in the current year − Holiday taken in the current year = Residual holiday at the end of the reference month.
Depending on the payroll processing software used by the company, the breakdown may be further disaggregated, distinguishing between accrued and taken entitlements for both the previous and the current year. Where the employee receives payment in lieu of holiday — for instance upon termination of the employment relationship — the residual field will show a zero balance, as the hours will have been settled in monetary form.