How to calculate average earnings: step by step instructions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-02 13:48

One of the concepts that a personnel officer, a novice payroll accountant, a payroll economist needs to know is the concept of average earnings. The employee, in turn, knowing how this value is calculated helps to control the correctness of the payments accrued to him, to predict his income. After all, the size of the average earnings affects many types of payments. Based on its value, the employee will be credited with vacation pay, sick leave payments, business trips, study leave.

The concept of average earnings

All citizens working on the territory of the Russian Federation are protected by labor laws. So, to calculate the average earnings, article 139 of the Labor Code of Russia is taken as the legislative basis. In addition, the use of this type of earnings for payments is provided for by other articles of the Labor Code. In addition to the Labor Code, the main legislative framework for accrualaverage earnings serve as Decrees No. 922 of December 24, 2007 and No. 375 of June 15, 2007, Federal Law No. 255, dated December 29, 2006. The application of all these legislative norms makes it possible to establish a single procedure for calculating this indicator for all organizations of the Russian Federation.

Based on article 139 of the Labor Code, the organization is quite en titled to change the algorithm for calculating the average, however, any such change should be in favor of the employee. The difference can be spelled out in internal acts, regulations. General definition of average earnings: this is the average amount of an employee's wages (usually per calendar day), calculated in accordance with the requirements of the law. Any accountant is familiar with this. The calculation of average earnings depends on the purpose for which it occurs. By type of calculation, we can propose a classification presented below.

It is based on the type of payment for which the calculation is made, and certain subtleties, parameters, and the legal framework specifically for these cases are taken into account. An absolutely separate group should consider the use of the indicator of average earnings for economic purposes. This indicator serves as an object of economic analysis, and its dynamics is laid down in the budget of the enterprise. And, finally, the average earnings as a macroeconomic concept serves as one of the criteria for the standard of living of the population.

General data collection algorithm for calculation

Before you start calculating the average wage for accounting purposes, you mustdefine:

• On what basis the employee will receive the average salary. Here it is necessary to understand what regulatory documents regulate the use of the average in a given situation.
• Calculation period - according to the law, the average is calculated based on the last year of work. In order to calculate benefits for the period of incapacity for work, they rely on a billing period of two years. If the internal acts of the organization establish a period other than that fixed by law, the accountant will have to count the average earnings twice and take a larger amount for calculation. If the employee has not worked the entire working period, then to calculate the average for vacations and other payments (except for social benefits), the number of days worked in the period must be taken into account.
• During what period the employee will receive the average salary.
• The amount of the employee's income for the calculation period. Here you need to understand what payments need to be taken into account, and which ones are not. The composition of payments taken into account is also determined by law.

Calculation for temporary disability benefits

The worker receives average earnings during the entire period of incapacity for work. However, its final size depends on the length of service of the employee (60% of the average is taken with experience up to 5 years, 60% - from 5 to 8 years, 100% - over 8 years). The calculation of the average wage for calculating sick leave is based on Decree No. 375. This decree takes into account all the nuances of calculating the average forsick leave.

For the billing period take 2 years before the onset of disability. The total number of days in the billing period is fixed at 730 days (this is a constant that cannot be changed, since no periods are legally excluded from the billing period).

It happens that the picture for the employee for the previous 2 years is completely unfavorable. (for example, a woman was on maternity leave for a long time), the situation can be changed. The employee, with a statement, asks the manager to use other 2 years to calculate the average, and the amount of income is taken for them. A sample application for adjusting the billing period is presented below.

There is a limit on income for the year, amounts above which are not accepted for accrual, in 2018 it is equal to 1,473,000 rubles, in 2017 the limit was set at 755,000 rubles, and in 2016 the maximum amount of income, from which the average salary for sick leave can be accrued amounted to 718,000 rubles.

In addition to the maximum limit, there is also a minimum limit. Earnings are compared with the situation if the employee received the minimum wage for the last 2 years. The correct calculation is taken, which is beneficial to the employee.

When changing jobs, a person from the old place must be issued a certificate 182Н, which indicates earnings for two years.

Thanks to this form, at a new place of work, the employer has the opportunity to take into account previous earnings to take them into account when calculating disability benefits. In the amount of earnings forthe billing period includes payments that were subject to insurance contributions to the FSS. If the payment of insurance premiums was not taxed, it will not be included in the amount of income. For example, not included:

• payment of sick leave in the billing period;
• paying for a woman's parental leave;
• payment under copyright agreements;
• material assistance.

The formula for calculating the average earnings for sick leave is quite simple. She looks like this:

SZ_bol =UD / 730, where SZ_{bol - average earnings for calculating sick leave; UD - income taken into account.}

The formula is sorted out. How to calculate the average earnings for sick leave is discussed in the example below.

Sick leave example

For example, employee Ivanova A. A. has an income for 2016 of 473,000 rubles, for 2017 - 496,000 rubles. Over the past two years, the employee was on sick leave for 15 days (payment amounted to 17,000 rubles) and twice received material assistance (in the amount of 3,000 and 7,000 rubles). It is necessary to calculate the average earnings per day for further calculation. Since the amount of income does not exceed the maximum and not below the minimum, the calculation will look like this:

SZ_{bol=(496000 + 473000 - 17000 - 3000 - 7000) / 730=1290, 41 R.}

Calculating the average for maternity benefits

The calculation of the average in the event of an employee leaving on maternity leave is regulated in the same way as the calculation of the average earnings for sick leave, that is, Resolution No. 375. The calculation algorithm is generally similar to the calculation for sick leave, but has severalfundamental differences. The most important of them is that the time when the employee received social payments (was on parental leave and sick leave) is removed from the billing period. The billing period itself in this case is not a constant and is calculated by the actual number of calendar days for the previous two years.

The average formula for calculating benefits and childbirth:

SZbir=UD / (D_p - ND_{p,), where}

• SZ_{bir - average for calculating maternity;}
• UD - income taken into account;
• D_{p - number of actual days in the period;}
• NA_{p - the number of non-counted days in the period.}

The amount of income taken into account, as in the previous case, is the income on which FSS contributions were accrued during the period. Similar to the sick leave calculation, there is a minimum and maximum threshold for qualifying income.

An example of calculating average earnings for maternity leave

If we assume that employee Ivanova A. And from the previous example goes on maternity leave, will the amount of the average daily wage per day, calculated according to the rules for the average for pregnancy and childbirth, change?

Period 2016-2017 has 731 days (2016 was a leap year). Using the formula above, the calculation looks like this:

SZ_{bir=(496000 + 473000 - 17000 - 3000 - 7000) / (731 - 15)=1315, 64 rubles}

Average earnings differ from those calculated for sick leave benefits.

The period for calculating vacation pay andcompensation for unused vacation

According to article 122 of the Labor Code of the Russian Federation, every worker has the right to annual leave. For the period of vacation, the employee is paid at the average wage, which is calculated in accordance with Decree No. 922. If an employee is fired, compensation for unused vacation pay is calculated in the same way as regular vacation pay.

The calculation period for calculating average earnings for vacation pay is usually the last fully worked 12 months (year). Days excluded from the billing period:

• when the employee did not work while maintaining average earnings;
• when the employee was on sick leave, on maternity leave;
• if the employee was idle for reasons within the competence of the employer;
• days the employee was on leave to care for a disabled child.

According to paragraph 6 of Resolution No. 922, if all the previous 12 calendar months consisted of excluded periods (for example, the employee was on maternity leave), then an earlier equal period is taken for the billing period. When converting months into days to calculate the period, in accordance with Government Decree No. 642, it is generally accepted that a calendar month has an average of 29.3 days. If there was a period in the month that was excluded from the calculation, then the number of days taken into account is determined using the proportion:

D_prin / D_mon =DW_{andsk/ 29, 3.}

The desired value of days is found from the proportion:

DWR_lawsuit =(D_prin / D_{month)x 29, 3 (days), where:}

• D_{prin - the number of days taken into account in the billing period;}
• DWR_{andsk - the desired number of days per month, which will be included in the calculation of the average.}

Income for vacation pay calculation

Income is also taken for the year. According to Decree No. 922, the amount of income includes all payments that are established at the enterprise. Include:

• directly accrued wages;
• cash rewards;
• payments related to working conditions;
• prizes.

The amounts that were produced during the excluded periods are not included in the income, as well as:

• material assistance;
• meal reimbursement;
• travel reimbursement;
• tuition compensation;
• utility reimbursement.

Summarizing all of the above, we can derive formulas for calculating the average daily earnings for vacation pay. For example, an employee worked in the billing period without excluded time. The formula is:

SZ_{otp=UD / (12 x 29, 3), where:}

• SZ_{otp - average earnings for vacation pay;}
• UD - income taken into account.

For example, an employee has not completed the full billing period. The formula will be:

SZ_otp =UD / ((M_op x 29, 3) + D_{avg), where:}

• SZ_{otp- average earnings for vacation pay;}
• UD - income taken into account;
• M_{op - number of months fully worked;}
• D_{sr - calculated by the formula above, days in months not fully worked.}

Special cases related to the accrual of vacation pay

It often happens that by the time the case occurs when the employee is paid the average salary, he did not have time to work 12 calendar months. In this case, the period will be the time that the employee actually worked, and the income will be used for this period accordingly.

When accounting for premiums in income for which the average is calculated, the following features are taken into account:

• bonus is included in earnings if it is accrued no more than once a month;
• if the premium is paid for an incomplete billing period, it is reflected in proportion to the actual time.

An example of calculating vacation pay for a fully worked period

In the case when an employee has worked out a full billing period, the calculation of average earnings is quite simple.

Ivanova A. A., whose vacation is expected in June 2018, fully worked the period from June 2017 to May 2018. Her monthly salary was 30,000 rubles, for 12 months, respectively, this amounted to 360,000 rubles. It is necessary to calculate what the average daily earnings will be for calculating vacation pay. According to the formula above, the calculation looks like this:

360,000 / (12 x 29.3)=1023.89 rubles

An example of calculating vacation pay if there was an excluded time in the billing period

Here you need a layout by months with subsequent summation. An example is shown below.

With this data, it is easy to calculate the average:

334246 / 333, 39=1002, 57 rubles

Calculation for other types of payments

In addition to social benefits and vacation benefits, there are other cases established by law when an employee receives an average salary. These cases include:

• business trip days;
• days when an employee undergoes a mandatory medical examination;
• days an employee donates blood as a donor;
• study vacation;
• holidays provided to parents of children with disabilities.

How to calculate the average earnings for the time of the above periods, is determined by the Decree of December 24, 2007 No. 922. The algorithm is completely identical to the calculation of the average for vacation pay.

In the economy

In the economy of an enterprise, the average monthly, quarterly, half-yearly, yearly earnings become the object of planning and analysis. Special budgets are planned for payroll costs. For example, it might look like the one below.

The company's management is doing everything possible to meet the established economic indicators, including the average wage.

In macroeconomics, at the level of the Russian Federation as a whole and its constituent entities, statistical agencies keep records of the average income of the population. In 2016, the average earnings in Russia amounted to 35,369 rubles, in 2017 - 39,085 rubles. An analysis of the growth of this indicator must be made taking into account inflation over the same period.

Average earnings, calculated for accounting purposes, for the needs of micro- and macroeconomics, is a very important and necessary concept. Without it, it is impossible to build a harmonious economic system.