Changes to annual leave cash payment date

Regulations applicable before 27 January 2026

In the earlier version of Article 171 of the Labour Code, it was difficult to clearly determine when the cash equivalent for annual leave should be paid. The practice of treating the date of termination (or expiry) of the employment relationship as the payment date, which meant that annual leave could no longer be taken in kind, stemmed from case law rather than directly from the statutory law.

A relevant example here is the Judgment of Polish Supreme Court of 1 March 2017 (case no. II BP 11/15), in which we read that: “(...) From Article 171 § 1 of the Labour Code, in a manner not giving rise to doubts, it may be derived that the right to the cash equivalent becomes due on the day of termination (expiry) of the employment relationship. This event should be perceived as the ‘designation’ of the date within the meaning of Article 455 of the Civil Code. As of the date of the conclusion of employment, there is no possibility of taking annual leave in kind, and from the perspective of the parties it therefore becomes clear that its settlement may take place exclusively by payment of the cash equivalent. The employer should pay it, and the employee has the right to apply to the court for its award. This means that as of the day of termination of the employment contract, the legal situation of the parties with regard to the cash equivalent for leave becomes clear; therefore, there are no grounds for the inactivity of the employee or the employer not to give rise to legal consequences (in the interest of the employer in the form of the commencement of the limitation period, and for the benefit of the employee through the accrual of statutory interest).

In another judgment of the Polish Supreme Court dated 29 March 2001 (case no. I PKN 336/00), the Court noted that “as of the date on which the employment relationship is terminated, the right to annual leave is converted into the right to the cash equivalent, and from that moment the limitation period for the claim for its payment also begins to run.”

New regulations as of 27 January 2026

Under the new regulations, the payment date for the cash equivalent for annual leave is the same as the date on which remuneration for work is paid, as set by the employer. If this date occurs before the employment relationship ends, the cash equivalent must be paid within 10 days of the termination of employment. If the payment date determined in this way falls on a non‑working day, the cash equivalent is to be paid on the preceding day.

Conclusion

The amendment to Article 171 of the Labour Code set clear deadlines for paying the cash equivalent for unused annual leave, resolving long‑standing interpretative issues. In practice, those issues had led to disputes, inconsistent approaches, and the risk of interest being charged.

Many employers were already paying the cash equivalent together with the employee’s final remuneration, which carried a degree of risk for them. The amendment to the Labour Code effectively recognised and formalised this practice by aligning the law with what was already happening in reality.

Author: Anna Sadowska, Payroll Project Manager