In many accounting magazines designed for professionals, there is a lot of information about how compensation is calculated for unused vacation. At the same time, when dismissing employees, as in many other cases, a lot of related questions arise. In this article we will try to tell you as detailed as possible how the payments for the unused annual rest period are calculated, how to calculate taxes and other deductions.
The first thing you should clearly understand is that workers who claim compensation for unused vacation days are divided into two categories. Firstly, these are retiring employees, and secondly, employees who continue to carry out their duties without leaving on their planned annual leave.
So, vacation is a period of time during which a person who has worked for more than eleven months, rests. In the case when the employee does not use his legal vacation or leaves, he must receive monetary compensation.
The legislative acts indicate that annual planned leave cannot be replaced by monetary compensation for workers working in hazardous industries, pregnant women, as well as persons under the age of eighteen.
When dismissing an employee who has held a managerial position or works in the field of the provision of educational services, for example, teachers, educators and the like, a person can count on compensation for unused vacation after ten months worked.
Is an employee being transferred to another business? In this case, at his request, compensation for unused vacation can be transferred to the account of the new organization. Moreover, it is possible to receive payments only for part of the vacation, and use the rest of the estimated rest time as intended. Moreover, the law states that the second part may not be less than two weeks.
At many enterprises there is a so-called collective agreement, in which some additional points may be indicated, according to which compensation for unused vacation is provided, but the prescribed conditions should not reduce the amount of money prescribed by law.
Compensation for unused vacation is calculated as follows: the number of months worked is multiplied by 2.33, that is, the number of vacation days earned for 1 month. The resulting number is multiplied by the amount earned by a person in one working day. As a result of such calculations, material compensation is obtained.
Compensation for unused vacation contributions for which should be deducted to pension and other funds causes some questions. Since payments for unused vacations are considered employee income, they are taxed on a common basis, that is, all taxes on personal income must be calculated and deducted . Since payments for unused vacation upon dismissal of an employee are made on his last business day, taxes are also transferred simultaneously with the calculation of monetary compensation.
In the event that an employee is fired due to labor discipline violations, for example, drunkenness, systematic lateness and the like, such an employee is not entitled to receive annual leave. Note that this does not mean that he does not have the right to rely on material compensation, which must be accrued and paid on time.
As you can see, there are a lot of nuances, each of which must be taken into account when calculating compensation for unused annual leave.