Here's an example of what I mean:
"It's time for some much needed rest and relaxation."
Or should it be:
"It's time for some much-needed rest and relaxation."
Noun phrases are normally hyphenated when used as adjectives. For example:
These is some oak panels.
This is my oak-pannelled wardrobe.
This is green cotton
This is my green-cotton sweater.
Hence you would say
This is a much-needed holiday.
That being said, English is somewhat relaxed in this regard, and both would be widely understood and are both widely used by English speakers: