How to calculate compensation for vacation upon dismissal?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The dismissal of any employee must be accompanied by the transfer of the due payments to him. This includes not only the salary for the entire period worked, but also compensation for the rest period if it was not used by the citizen during work. Vacation compensation must be calculated correctly, for which the average earnings of a company employee are determined in advance. If this payment is determined incorrectly, this will lead to bringing the head of the company and the chief accountant to responsibility.

When is compensation paid?

Compensation for leave should be paid upon the dismissal of any employee en titled to take days off. It does not matter for what reason the employment relationship is terminated. It is appointed upon dismissal of a citizen of his own free will, on the basis of an agreement between the parties or at the initiative of the head of the company.

The rules for calculating and paying compensation for unused vacation are contained in Art. 127 TK. Funds must be transferred on the last day of work of a specialist. They are added to the salarywork period.

Refusal to pay this compensation can only be due to the fact that at the time of termination of the employment contract, the employee had no unused rest days.

Calculation rules

Compensation for unused vacation must be correctly calculated by the head of the company. The procedure is carried out by the accountant of the organization. The calculation begins from the moment when an order is sent to the accounting department from the personnel service on the dismissal of a specific hired specialist.

The order must contain information about the reason for termination of the employment contract, as well as the number of days of unused vacation. Additionally, information may be contained on excessively provided vacation days to be withheld if the vacation was issued for the employee in advance. Only on the basis of this information is calculated compensation for unused vacation upon dismissal of an employee.

Rules for determining vacation days

Each employee of the company on the basis of Art. 114 of the Labor Code has the right to count on annual paid leave. If it is not used for the year, then the remaining days of rest are carried over to the next year. 28 days are assigned per year, so it is this number of days that is taken into account when calculating the monetary compensation for vacation.

If an employee for various reasons does not exercise his right to rest for the whole year, then compensation is calculated for 28 days. If several months have passed since the beginning of the year, then the number of days is calculated proportionally to thistime period.

How are rest days calculated?

To calculate compensation for unused vacation upon dismissal, it is important to determine how many days a citizen can rest. For example, an employee of the company has worked since the beginning of the year for 5 months without using his right to leave. To determine the number of days for which compensation is calculated, you must use the formula: number of days=28/125=11, 7.

In this formula, 28 is the number of vacation days offered annually to each employee of the company. 12 is the number of months in a year, and 5 is the number of months the citizen has worked for the company since the beginning of the year.

How is vacation pay calculated?

As soon as it is determined for how many days a citizen can receive compensation, the accountant determines the average daily earnings of a company employee. For this, the following formula is used: income per year / 12 months / average monthly number of days per month.

The average number of days per month is 29.3, as this is the value used for official calculations. For example, a citizen receives a monthly salary of 44 thousand rubles. This includes not only his official salary, but also various allowances, bonuses and other additional payments from the employer. His annual income is 44,00012=528 thousand rubles.

Based on the available values, the average daily earnings are determined: 528,000/12/29, 3=1501 rubles. The amount received is multiplied by the number of unused days: 150111, 7=17561rub. paid to the employee.

Calculating leave compensation is considered a fairly simple process if you understand it well.

Which payments are not included in the calculation?

When determining the average daily income of an employee, various cash receipts are taken into account, represented by an official salary, various allowances or bonuses, but there are some payments that cannot be used for these purposes. These include the following enumerations:

• payments that an employee received during a business trip, if they did not exceed the norms established by law, since personal income tax is not paid from them, and insurance payments are not withheld;
• salary during the period when a citizen, on the basis of production necessity, worked in a company while maintaining average earnings;
• Sick leave benefit related to the detection of various diseases or child care;
• payments received by an employee for the period when he could not cope with his official duties due to the fault of the employer or due to unforeseen circumstances.

All such payments are calculated and determined only by the company's accountant. In addition, many employees prefer to independently calculate compensation for unused vacation, as they fear that they will be deceived by the employer. In this case, they can check the correctness of determining the payment.

What to do,if it is impossible to determine earnings?

An employer may face a situation where, from the very beginning of the year, an employee has been on a long business trip or on parental leave. In this case, he receives funds that are not used in calculating vacation compensation.

Under such conditions, the calculation should be based on the tariffs and average charges assigned to other employees working in a similar position. This takes into account the amount of earnings approved by the company.

If a citizen worked in a company where he received a gray salary issued in an envelope, then by law he will not be able to count on compensation for vacation upon dismissal. Therefore, it will not be possible to attract an employer for the absence of such a payment.

How to deal with overpaid compensation?

Difficulties for accountants often arise when they calculate the amount of vacation pay when an employee takes a vacation with subsequent dismissal. Mistakes are often made in this case.

If an employee leaves before the end of the period for which he issued a vacation, the company may withhold the previously transferred vacation pay on the basis of Art. 137 TK. If it turns out that the accountant of the company, for various reasons, incorrectly calculated compensation for unused vacation for the year, then he is held liable. Funds are being collected from his salary to cover the damage.

Does work time count?

When determining compensation, it must be taken into account, duringhow long does a citizen work in the company. Therefore, it is important to know the legal requirements:

• if a citizen has been working in the company for more than 11 months, then the calculation takes into account rest days for all months worked;
• if labor duties were performed for one month or less, then compensation is accrued only for 14 days;
• if the period of employment is between 1 and 11 months, then the compensation is based on a proportional calculation.

If a person has worked for more than 5, 5 months, but less than 11 months, then he can count on full compensation only under the following conditions:

• the company is being liquidated, so all employees working in the company are leaving;
• citizen resigned due to being sent to military service;
• the employer independently decides to transfer the employee to another company.

Additionally, the employer may, for other reasons, transfer the full amount of vacation compensation to the employee.

Is there an additional vacation pay?

Many employees are en titled to special additional leave for various reasons. In this case, the manager must ensure that employees regularly arrange vacation days, as they are not carried over to the next year.

If a person can use additional leave, then employers usually take them into account when calculating compensation. To do this, the formula uses not 28 days, but an increased value independing on how long the extra leave is.

Can an employer refuse to pay?

It is not uncommon to encounter the fact that an employee accumulates a large number of rest days carried over from previous years. Under such conditions, the employer usually insists that the vacation is lost, but this is a violation of the law.

Every employee has the right to rest, so the rest days assigned by law cannot be lost. This applies to full-time employees, part-time employees or employees working on the basis of a fixed-term employment contract.

In case of violation of the requirements of the law, employees can file a complaint with the labor inspectorate or even file a lawsuit.

Taxation of payments

A company accountant must not only understand how to calculate vacation compensation, but also what taxes are paid on this payment. All income of each officially employed citizen is subject to taxation. Therefore, 13% in the form of personal income tax is paid from the compensation, and insurance premiums are also transferred.

It is not uncommon to face the fact that many unused days accumulate, for which an employee can receive compensation, so compensation and payments to the budget will be significant.

What to do if the employer violates the law?

Quite often, employees have to deal with the fact that the director of the company pays lessamount than required by law. In rare cases, compensation is not assigned at all, although the citizen is required by law to receive it, and is also officially employed in the company. Under such conditions, the labor rights of a citizen are violated, therefore, a claim should first be sent to the management of the company. If payment is not assigned within 30 days, then complaints are sent to the following authorities:

• Labor inspection. The appeal can be made in writing or on the website of the organization. It is reviewed within 30 days. On the basis of such a complaint, the employer is held liable, and is also forced to transfer the due amount to the former employee. The applicant is notified of the results of the verification in writing.
• Prosecution. Usually a complaint to this organization is filed simultaneously with an application submitted to the labor inspectorate. The appeal indicates exactly which rights of the employee were violated by the former employer. Based on this document, an audit is carried out within a month. If significant violations are indeed found, then the company is held accountable.
• Filing a lawsuit. With the help of litigation, you can not only bring the violator to justice, but also recover moral damages from the former leader. Therefore, when drawing up a claim, especially much attention is paid to listing all claims.

It is advisable to draw up appeals to various government agencies immediately after dismissal and receiving compensation, which is much lower than the amountrequired by law for an employee.

Pen alties for employers

If a company does not pay compensation in a timely manner or significantly reduces the payment without good reason, then this is the basis for holding its officials liable. The main methods of punishment include:

• forcibly, the company transfers the due compensation to the former employee, and additional interest is charged, and the pen alty is 1/300 of the refinancing rate for each day of delay;
• the company will have to pay a fine for violating the employee's labor rights;
• with repeated detection of violations, employees of the labor inspectorate or prosecutors can completely suspend the activities of the company or bring the management to criminal liability.

Those or other measures of responsibility are assigned only by the controlling authority. It is most advisable to file a complaint with the labor inspectorate.

Conclusion

When an employee is dismissed, the head of the company is obliged to transfer all the due payments to him. These include compensation for unused vacation days. This payment is calculated based on the period of work and the average salary of a citizen.

If, for various reasons, the employer delays the payment or significantly reduces it, then this is the basis for applying different pen alties to him from the prosecutor's office or the labor inspectorate.