For 2026, the Central Leave Fund’s expenses are budgeted at €125 million, a decrease of €1.1 million compared to 2025. This amount represents 94% of the total budgeted expenditures for the year.
Overall Budget Increase
The 2026 budget, which will be reviewed by the Finance Committee, forecasts total expenses of €132.4 million. This is up from €128.3 million in the 2025 budget, representing an increase of 11.4% compared to revised 2025 expenditures, which are estimated at €118.9 million.
The main expenses include:
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Services purchased from the Social Insurance Services: €815,500
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Paid annual leave for eligible employees: €124.6 million
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Employee Leave Grant Scheme: €936,000
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Summer Camp Operations Grant Scheme: €859,000
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Administrative and management costs: €233,200
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Contingency and reserve fund for unforeseen expenses: €5 million
Revenue Growth
The 2026 budget expects total revenues of €144.3 million, compared to €146.6 million forecasted in the 2025 budget. Revenues mainly come from employer contributions, which are expected to reach €140 million. Other sources include interest of €4.2 million and additional receipts of €35,000.
All employers who are not exempt are required to contribute to the Central Leave Fund. Contributions are at least 8% of employees’ insurable earnings and vary depending on the number of leave days an employee is entitled to.
The contribution calculation also takes into account:
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Average insurable earnings of employees covered by the Social Insurance Fund
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The relationship between average insurable earnings in the Central Leave Fund and the Social Insurance Fund
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Employer participation trends over previous years, which determine the number of contributing employees
Revised revenues for 2025 are estimated at €134.5 million, reflecting a 7.3% annual increase.
Reduced Budget Surplus
The budget surplus for 2026 is expected to fall to €11.9 million, compared to the revised 2025 surplus of €15.6 million, a decrease of approximately 23.7%. This reduction is mainly due to the inclusion of a €5 million reserve for unforeseen expenses, included in the budget for the first time.
Cash Reserves
The fund’s cash reserves are expected to rise from €136.5 million at the beginning of 2026 to €148.4 million by the end of the year. Further increases are forecasted, reaching €161.7 million by the end of 2027 and €176.7 million by the end of 2028.
What is the Paid Leave Payment
The Law on Annual Paid Leave was enacted on March 3, 1967, and implemented on August 1, 1967. The law ensures that all employees are entitled to paid annual leave and provides the framework for properly utilizing this leave, particularly for lower-paid workers.
Who is Eligible
The law covers all employees in the public and private sectors, including apprentices.
Employees are paid during their annual leave either directly by their employer or through the Central Leave Fund, which was established specifically for this purpose. Employers are required by law to contribute to the fund.
Employees who work 48 weeks a year are entitled to four weeks of paid annual leave. For employees with a five-day workweek, this means 20 working days of leave. Employees with a six-day workweek are entitled to 24 working days.