January 31, 2025
How does understanding paid vacation days by country affect global payroll?
To successfully manage global payroll, it’s important to not only have payroll specialists with expertise in the industry, but it’s also vital that those experts are aware of cultural nuances in the countries they manage payroll for. In this blog, we’ll explore:
Let’s start by looking at three countries with the most paid vacation days and the contributing cultural factors.
Among OECD countries, employees in Austria have the most paid vacation days, with a generous 25 days off along with 13 public holidays, adding up to a grand total of 38 paid vacation days per year. A minimum of 25 paid vacation days is not only offered but required according to Austrian labor laws, showing dedication to work-life balance from the Austrian government.
In Austrian society, family plays a key role in maintaining a healthy work-life balance, ensuring that individuals have quality time with their loved ones. In the workplace, Austrians value punctuality and efficiency. Working overtime isn’t seen as a sign of hard work, but rather as poor time management and low performance. These cultural values, alongside many others, contribute to a healthy balance between the office and the home.
In France, employees also benefit from 25 paid vacation days along with 11 public holidays, adding up to 36 days off annually. Work is valued just as much as leisure, resulting in shorter work hours compared to other countries and strict limits in the law to prevent people from exceeding designated work hours.
Beyond business formalities, the French embrace national holidays as a way to preserve their heritage and strengthen team dynamics. As a country that is rich with art history, there ’s much to enjoy outside of work, and the French know how to manage work-life balance well.
In Spain, employees enjoy 22 paid vacation days along with 14 public holidays, adding up to a total of 36 days off per year.
Although Spain’s working hours start late and run later than the usual nine-to-five job, long lunch breaks are common to account for time to both eat and rest. Work-life balance is prioritized through labor laws that limit overtime hours, flexible working hours, and one of the highest pension rates for employees. Building meaningful relationships with colleagues is also common in Spain, and employees often share personal stories with each other throughout the workday.
Now that we’ve explored some of the countries that have the most paid time off, let’s take a look at some countries on the other end of the spectrum.
Due to a lack of labor laws that mandate a minimum amount of paid leave, employees in Micronesia only benefit from a total of 9 paid vacation days per year.
Work culture in Micronesia is defined by community, respect for elders and hospitality. In society, elders are highly respected as central figures in the community, and they are looked to for wisdom. In contrast with some western cultures that value individualism more, Micronesian culture places more emphasis on the community, leading to a business culture that values consensus over individual opinion.
Although the U.S. observes 10 public holidays, it is also the only developed country without a legal requirement for employers to provide a minimum number of paid vacation days. On average, employees will receive 14 days off after their first year of working with a company. According to the Organization for Economic Cooperation and Development (OECD), 15% of workers don’t even benefit from paid vacation days at all.
Without any federal laws to define or mandate paid vacation days, it is left to each company’s discretion to determine how many paid vacation days to provide. Employees in the U.S. typically worry that taking too much time off will negatively impact their career, leading to an often unhealthy work-life balance and increased likelihood of burnout.
In Mexico, employees are entitled to at least 12 paid vacation days per year under the country’s Federal Labor Law. As tenure increases, the amount of paid time off also increases. There are also 8 paid public holidays, adding up to atotal of 20 paid days off per year. The Federal Labor Law was updated recently in January 2023 to increase the minimum amount of paid vacation days, showing some movement towards better work-life balance.
Work culture in Mexico is characterized by an emphasis on personal connection, a vibrant and lively culture, formal hierarchies, and a flexible approach to meeting times and agendas.
As you can see, there are many different cultural and legal factors that affect the amount of paid time off employees receive per year. However, work-life balance is something that every employee seeks within their career, and achieving that healthy balance can have a direct impact on an individual’s mental and physical health.
According to the MindShare Partners’ 2021 Mental Health at Work Report, 84% of respondents expressed that their workplace environment contributed to a mental health challenge. Additionally, APA’s 2022 Work and Well-being Survey revealed that 81% of workers will be looking for employers that support mental health in the future, further proving the impact that the right (or wrong) career can have on someone’s life outside office hours.
When it comes to global payroll, maintaining compliance with local labor laws and paid vacation policies is essential. As companies expand into new markets, understanding different regulations becomes critical to maintaining accurate and timely payroll while supporting employee well-being.
By staying informed about regulations and cultural differences, businesses can better navigate the complexities of global payroll while fostering a positive employee experience with healthy work-life balance. Contact us today to discuss your global payroll needs.