In this meta-analysis, we investigate the impact and conditions under which vacations affect employees’ well-being and its fade-out trajectories after returning to work. In addition to the reanalysis of data from a previous meta-analysis (De Bloom et al., 2009 with literature search until 2008), a new systematic literature search was conducted in various databases (time period: 2009–2020). Data from 13 studies (N = 1,428) were analyzed with an average vacation duration of 11 days (range: 4–23). Our results show that vacations improve well-being (d = 0.25), with changes observed across various well-being facets, such as positive affect, negative affect, stress, and exhaustion (ds = 0.18–0.38), but not life satisfaction (d = 0.10). However, well-being improvements fade after returning to work, with no significant differences from pre-vacation levels after the first post-vacation week (ds ≤ 0.12). Vacation duration, gender distribution, and occupational study group did not moderate the reported effects. The studies reported many factors that may shape vacation effects, including stress- and recovery-related traits, vacation and recovery experiences, and job characteristics. Our findings indicate that vacations positively affect an employee’s well-being. Interestingly, extending the vacation duration does not maximize its benefits. Given that well-being declines rapidly after the first post-vacation week, we therefore recommend planning and taking regular short vacations throughout the year. More research is required to establish evidence-based guidelines for vacations exceeding 3 weeks and the interplay of personal, recovery, job, and vacation factors in influencing well-being.