The general rule enshrined in labor legislation requires the employer to pay all amounts due to him on the last day of dismissal of an employee. Such payments include, among other things, compensation for unused vacation.
In this article, we will dwell in more detail on the employer’s obligation to pay compensation, cases when such compensation is not paid, as well as what an employee should do if his rights are violated.
What does severance compensation mean?
When talking about compensation for leave upon dismissal, we usually mean its most general case, which applies to absolutely all employees.
This is compensation upon dismissal in the form of vacation pay due for vacation not used during the period of work. Every employee has the right to annual paid leave, and at the time of dismissal, part of it (and sometimes even several years of leave) may be unused. Art. 127 of the Labor Code of the Russian Federation obliges to pay this part in case of dismissal, no matter what its actual duration turns out to be. The reason for termination of the employment contract does not matter when calculating compensation upon dismissal. How to calculate days of compensation upon dismissal? The duration of standard annual leave is 28 calendar days (Article 115 of the Tax Code of the Russian Federation). However, for some categories of workers it is extended (Articles 116–119, Article 348.10 of the Labor Code of the Russian Federation). Vacation pay upon dismissal is calculated based on the length of vacation that is due to a particular person, taking into account the extension, if any. Holidays do not include holidays.
The beginning of the year to which the annual leave will relate is determined individually by each employer for each specific employee - from the first day of his employment for this job (clause 1 of the Rules on regular and additional leaves, approved by the People's Commissar of the USSR on April 30, 1930 No. 169), and the end may be shifted if, during the calendar year calculated from the starting date, the employee experienced periods that were not included in this length of service (Article 121 of the Labor Code of the Russian Federation).
Calculation of compensation for dismissal in 2021 is also carried out for persons signed under a fixed-term (up to 2 months) employment contract (Article 291 of the Labor Code of the Russian Federation) or for part-time work (Article 93 of the Labor Code of the Russian Federation). For a fixed-term contract, vacation pay is calculated based on the fact that each month worked corresponds to 2 working days of vacation.
There is no need to accrue compensation for unused vacation upon dismissal to employees:
- drawn up under a GPC agreement (Article 11 of the Labor Code of the Russian Federation);
- those who worked less than half a month (clause 35 of the Rules on regular and additional leaves, approved by the People's Commissariat of Labor of the USSR on April 30, 1930 No. 169).
The accrued compensation upon dismissal is subject to insurance premiums, personal income tax and is paid along with other amounts due to the employee on the last day of his work activity (Article 140 of the Labor Code of the Russian Federation).
ConsultantPlus experts have made an analytical selection on legal disputes with employees regarding the payment of dismissal compensation. Get trial access to the system and find out court decisions on the most common questions.
Read about whether it is possible to receive vacation pay compensation without resorting to dismissal.
Severance pay
In some cases, employers, in accordance with Article 178 of the Labor Code of the Russian Federation, must include severance pay in the calculation. It varies in size and depends on the reasons for termination of the employment contract and the category of employees. In particular, persons who were fired due to:
- inability to continue working due to health reasons;
- conscription for military or alternative civilian service;
- reinstatement of the employee who previously performed this work;
- a person’s refusal to transfer due to the organization’s relocation to another location.
In the amount of average monthly earnings, severance pay will have to be paid:
- upon dismissal due to liquidation of the organization;
- when reducing the number or staff of employees.
In addition, such employees have the right to receive compensation in the amount of average monthly earnings for the period of employment for a maximum of two months from the date of dismissal. But these amounts are not included in the calculation upon dismissal, since they are paid later.
Formula for calculating compensation in 2021
How to correctly calculate vacation compensation upon dismissal? In 2021, a formula is used for this, according to which the amount of compensation upon dismissal is equal to:
KNO = SDZ × NDO,
Where:
KNO - compensation for vacation upon dismissal, if the vacation was not used;
SDZ - average daily earnings;
NDO - the number of unused vacation days.
When calculating compensation upon dismissal, the amount of average daily earnings Art. 139 of the Labor Code of the Russian Federation prescribes to determine it as follows:
SDZ = WIP / 12 / 29.3,
Where:
WIP - wages accrued for the estimated period of time (12 months before the month of dismissal);
12 - number of months in the billing period;
29.3 - the average number of calendar days per 1 month of the billing period.
However, not all income paid by the employer and, accordingly, not all periods during which the employee works for the employer can be taken into account when determining the average daily earnings (clause 5 of the Government of the Russian Federation Resolution No. 922 dated December 24, 2007). In particular, it does not include accruals for periods of vacations, sick leave, and business trips.
In this case, the working time taken into account to calculate the average daily earnings will be the sum of the number of days corresponding to months worked in full, the number of days in each of which will be taken as 29.3, and the amount of calendar days of work for incomplete months (clause 10 resolution No. 922).
The procedure for accounting for bonuses related to wages in the calculation depends on the period for which they are paid (clause 15 of Resolution No. 922).
For more information on how to take bonuses into account when calculating compensation, read the article “Are bonuses taken into account when calculating vacation pay?”
In addition, with regard to income for the billing period (12 months), the following situations are possible:
- The income occurred only in the month of dismissal. Then the average daily earnings will be calculated for this month alone, dividing the salary accrued in it by the average number of calendar days calculated for this month (clause 7 of Resolution No. 922). The last value will be calculated from the number 29.3 in proportion to the share of calendar days corresponding to the time of work in the month of dismissal in the total number of days in the same month (clause 10 of Resolution No. 922).
- There was no income in the billing period. Then the period for calculating the average daily earnings is shifted to the previous period of the same duration (clause 6 of Resolution No. 922). And if there is no income there, then the average daily earnings will be calculated from the salary or tariff rate (clause 8 of Resolution No. 922).
For more information about calculating vacation pay in the absence of income in the billing period, read the material “Calculating the number of vacation days in 2021 - 2021 - an example.”
Wage
The salary of a dismissed employee is calculated and paid to him in accordance with the salary or tariff rate. It is not difficult to calculate the amount that a person actually earned. The main thing is to remember that all time actually worked from the beginning of the month is paid, including the last working day. Let's look at an example of calculation upon dismissal.
Example:
The salary of accountant Vera Ivanovna Semenova, who decided to quit on May 25, is 32 thousand rubles. In May 2021 there are 17 working days, which means that Semenova actually worked 12 days. This is easy to calculate using a production calendar, which takes into account all holidays and weekends. Then a simple formula applies:
Daily earnings = salary divided by the number of working days and multiplied by the actual time worked.
So, Semenova’s salary for May will be 32,000 / 17 * 12 = 22,588 rubles. This amount should be credited to her, and it should be given in person after deducting personal income tax at a rate of 13%.
Obviously, calculating the amount to be paid for piecework or shift payment is even easier. In this case, simply multiply the rate by the number of shifts worked or the volume of work performed. Such calculations are no different from the usual salary calculations that an accountant performs for all employees on a monthly basis.
Leave compensation upon dismissal: calculation
The number of days of unused vacation is determined based on the fact that a full year of experience giving the right to it corresponds to 28 calendar days, and each full month corresponds to 2.33 calendar days. When the last month of service turns out to be incomplete, then, when calculating compensation upon dismissal, it is taken into account as full if the number of days of work in it exceeds half a month, and is not taken into account when the period worked in it is less than half a month (clause 35 of the Rules on regular and additional holidays approved by the USSR People's Commissariat of Labor on April 30, 1930 No. 169).
There are situations in which it becomes mandatory to pay compensation for leave upon dismissal for a full year, although in reality it turns out to be not fully worked out (clause 28 of the Rules on regular and additional leaves, approved by the People's Commissariat of Labor of the USSR on April 30, 1930 No. 169). These are cases when the employee worked:
- more than 11 months and they have all entered the length of service that grants the right to leave;
- from 5.5 to 11 months, but is forced to resign due to reduction in numbers, due to enlistment in military service, assignment to study or other work, or due to revealed unsuitability for work.
The law does not require rounding the number of vacation days determined by calculation when calculating compensation upon dismissal. Therefore, when calculating leave compensation upon dismissal, you can use a number that has decimal places, or you can reflect in the accounting policy a provision on rounding it to a whole number. When deciding how compensation for leave upon dismissal is calculated, you should keep in mind that rounding should always be done in favor of the employee (letter of the Ministry of Health and Social Development of the Russian Federation dated December 7, 2005 No. 4334-17).
Let's consider calculating compensation for unused vacation step by step.
Tax liens
According to Article 217 of the Tax Code of the Russian Federation and Article 9 of Federal Law of Russia No. 212, vacation compensation is subject to insurance contributions and personal income tax.
Important. The tax must be transferred exactly on the day of issuance of payments, and contributions to the Social Insurance Fund and the Pension Fund before the 15th day of the month following the day of departure of the employee.
The Federal Tax Service informs that payment for vacations not taken must be reflected in the person’s income certificate.
When fees and taxes are withheld from the accrued amount, alimony and other debts specified by the court must be deducted from the amount received.
An example of calculating compensation for unused vacation
Employee Fedorov V.A. hired at Solnyshko LLC on December 3, 2019, and left on May 25, 2021.
Fedorov was on vacation in July 2021 (28 cal. days). The employee did not have any periods not included in the vacation period. The calculation period for calculating compensation is 12 months preceding the month of dismissal, i.e. from May 2021 to April 2021. During this period, the employee earned 632,400 rubles.
Step 1 - calculate the length of service:
- from 03.12.2019 to 02.12.2020 - 12 months;
- from 12/03/2020 to 05/02/2021 - 5 months;
- from 05/03/2021 to 05/25/2021 - 22 days, which exceeds half a month, which means the full month is taken into account.
Total experience is 18 months
Step 2 - determine the number of vacation days from the start of work. 18 months x 2.33 = 42 days.
Step 3 - determine the number of days of unused vacation.
42 days - 28 days used = 14 days
Step 4 - calculate average daily earnings (ADE).
- the number of fully worked months in the billing period is 11;
- in incompletely worked August it is equal to 2.84 (29.3 / 31 days x (31 days - 28 days));
- SDZ is equal to 1,945 rubles. (RUB 632,400 / (29.3 x 11 months + 2.84 days)).
Step 5 - determine the amount of compensation for vacation.
RUB 1,945 x 14 days = 27,230 rub. When paying compensation, personal income tax must be withheld from it. Thus, Fedorov will receive 23,691 rubles. (RUB 27,230 - 13%).
Special situations for accrual and payment
Difficulties in determining the amount of vacation compensation upon dismissal may arise in the following situations:
- In the period for which the right to leave is determined, there are time intervals that are not included in the length of service. In this case, the beginning of the year following the one that includes such intervals is shifted by the corresponding number of calendar days. And vacations at your own expense are shifted to the beginning of the next year only if their total duration for the year exceeds 14 calendar days (Article 121 of the Labor Code of the Russian Federation) and the shift occurs by the difference between the actual number of days of vacation without pay for the year and 14 calendar days days.
- The employee quits before the end of the year for which he has already taken a full vacation. In this situation, upon dismissal, that part of the vacation pay is withheld from him, which corresponds to the overpaid part of the vacation (clause 2 of the Rules on regular and additional vacations, approved by the People's Commissar of the USSR on April 30, 1930 No. 169). However, if the dismissal occurs on grounds that give the right to payment of vacation pay in full, then compensation payments upon dismissal attributable to the overpaid part of the vacation are not considered unnecessary.
For information on how to calculate vacation pay attributable to the overpaid part of the vacation, read the article “Deduction for unworked vacation days upon dismissal .
If an employee goes on vacation with subsequent dismissal, the calculation of compensation and its payment must be made on the last working day. On this working day preceding the vacation with subsequent dismissal, the employee must receive a final payment, work book and other documents necessary for further employment (letter of the Federal Service for Labor and Employment dated December 24, 2007 No. 5277-6-1).
Is it possible to check online?
It is possible to check the manual calculation of compensation upon dismissal via the Internet. To do this, you will need to enter into the appropriate program all the information it requests, taking into account the features described above. The program will process the entered data and issue the estimated amount of compensation.
If you doubt your calculations, use the Ready Solution from ConsultantPlus. Get trial access to the system and learn for free how to calculate and pay compensation for unused vacation upon dismissal of an employee.
What to do if the compensation payment is not accrued or not paid on time
A delay in calculating compensation for unused days or its absence is a reason to appeal to the labor inspectorate and the court. The Code of Administrative Offenses provides for fines for employers in the amount of:
- 10–20 thousand rubles – for officials;
- 30–50 thousand – for legal entities;
- 1–5 thousand – for entrepreneurs operating without forming a legal entity.
For repetition of similar violations, the punishment increases:
- 20–30 thousand rubles or suspension from activities for 1–3 years – for officials;
- 10–30 thousand – for those who are not a legal entity;
- 30–50 thousand – for legal entities.
By filing a lawsuit against the employer, the employee has the right to claim unpaid compensation, underpayment, compensation for moral damage, and legal costs associated with the trial. An employee has the right to file a claim with the appropriate authorities to recover additional payment from the employer before the expiration of 3 months from the date of dismissal.
Results
Payment of compensation for unused vacation upon dismissal of an employee is mandatory for the employer. Its calculation must be done taking into account all the features of determining the average daily earnings and the number of days of unused vacation. Excessive vacation pay paid in advance is subject to withholding. The calculation can be checked via the Internet.
Sources:
- Tax Code of the Russian Federation
- Labor Code
You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.
Who is paid?
Compensation for unused vacation is due to absolutely all employees who leave the organization.
It does not matter for what reason the employee leaves. This may be your own desire, the initiative of the employer, an agreement of the parties, staff reduction, dismissal for absenteeism.
The employer has an obligation to pay compensation for unspent vacation in relation to all resigning employees.
At the same time, both basic and additional vacation days that the employee did not have time to spend are compensated.
