A payroll dashboard shows 34 days in October 2026: six unused days from 2025 and the full 28-day annual entitlement for 2026. This is a planning figure, not a verified earned balance. The total alone does not tell a manager which days need attention before December. In Estonia, the year in which leave accrued sets the ordinary expiry date. A single undated balance can also lead to a wrong final payment when the employment ends.
I am Dmitri Schmidt, CEO of AccRes. This guide shows how an Estonian employer can record leave by accrual year, put older days into the annual schedule, and separate time off from payment on termination. The worked example assumes an ordinary employee with no parental-leave or service period that pauses expiry. It is about leave balances and scheduling; our separate guide covers the calculation of holiday pay.
Give each accrual year its own expiry date
Under Employment Contracts Act § 68(6), the claim expires within one year after the end of the calendar year for which the leave is calculated. Six days left from 2025 can generally be used through 31 December 2026; days accrued for 2026 generally through 31 December 2027. Section 68(5) still says annual leave is to be used in the calendar year, with the unused part carried forward. Carryover is not permission to postpone every year's leave routinely.
In the example, the 34-day dashboard figure on 16 October 2026 should be split into two records: 2025 → 31 December 2026 and 2026 → 31 December 2027. Check how many of the 2026 days were actually earned and remain unused by that date. Planning the older days first is a sensible operating rule, not an automatic allocation order stated in the Act. Verify the earned balance separately if the employee had a period that does not count towards accrual.
Put carried days in the leave schedule
The employer must make each calendar year's leave schedule known to employees in the first quarter, by 31 March, and include both current annual leave and unused leave under § 69(2). The Labour Inspectorate’s Tööelu guidance says the employer must enable leave before it expires. A six-day 2025 balance discovered in October 2026 calls for a real date in the remaining months, not a note to revisit next year.
For leave absent from the schedule, an employee generally gives 14 calendar days' notice in a form that can be reproduced in writing (§ 69(3)). Changing the schedule requires agreement. Splitting annual leave also requires agreement and at least 14 calendar days must be taken consecutively (§ 68(5)). Section 69(7) gives specified employees a right to request leave at a suitable time; take that priority into account when scheduling.
Check pauses before writing off a balance
Section 68(6) pauses expiry during maternity, paternity, adoptive and parental leave, as well as military or alternative service. The Court of Justice judgment C-684/16, paragraphs 40–47 and 81 also rules out automatic loss of EU-protected paid leave without checking whether the employer genuinely enabled its use and gave sufficient information; the employer may need to prove this. Do not zero out every employee's 2025 days in a bulk payroll action. Check absences, the accrual year and any dispute before changing a balance.
Accrual has its own distinction. Under § 68(2), agreed unpaid leave and parental leave generally do not count as time that earns annual leave. That affects days earned; it does not replace the expiry check. Section 55 assumes 28 calendar days, unless a longer entitlement is agreed or the law provides one. If prolonged illness prevented leave use, review that case separately in light of Court of Justice judgment C-350/06 rather than applying the example's ordinary date mechanically.
Cash cannot replace leave during employment
Section 70(3) makes an agreement to compensate annual leave with money or another benefit during employment void. The answer to an unused December balance is to arrange leave, not pay an extra bonus instead. At termination, § 71 requires cash compensation for unused, unexpired annual leave. Before excluding older days from a final settlement, verify any paused period and the accuracy of the balance.
For payroll and bookkeeping, keep the accrual year, days used, periods that paused expiry and agreed leave dates visible. These are practical control fields for explaining a balance and preparing a final settlement. National and public holidays do not count as annual-leave days under § 54(3), so calendar days away and leave days deducted can differ.
A total leave balance is not enough for a year-end review. Add the accrual year and any expiry-pause period before deciding which days need scheduling.
Review unused leave by year, not just by total days. In the ordinary case, a 2025 balance needs to be used by the end of 2026, while 2026 leave has a different claim deadline. Check pauses and the earned amount before changing a payroll balance. The employer should schedule time off while the contract runs; cash compensation belongs to termination for unused, unexpired days.
If your payroll balance and leave schedule disagree, contact AccRes. We can help reconcile the year-by-year record before the next schedule or final settlement.