The procedure for calculating compensation for unused vacation

The employer is obliged to compensate the employee for unused vacation upon dismissal, or at his request. Knowing the procedure for calculating compensation can be useful to both the employer and the employee to verify the correctness of the amounts paid.

You will need

• - calculator;

• - information on the amount of payments to the employee for the billing period;

• - information on the number of days and months worked.

Instruction manual

1

Compensation is payable in two cases: upon dismissal and instead of an additional vacation (over 28 days). In the latter case, a written statement of the employee is required with a request to pay a cash amount instead of vacation. To calculate compensation for unused vacation leave, you must successively calculate the amount of all payments to the employee, the billing period, average daily salary and the number of unused vacation days.

2

Payments that are taken into account when calculating average earnings in addition to salaries include bonuses, various allowances and coefficients that are charged in difficult working conditions. All of them must be summarized.

3

To calculate the average daily salary, it is necessary to divide the received payment amount into 12 (the number of months in a year, if the calculation is for a full period) and the average number of calendar days 29.3. This formula is used if an employee has worked in the company for at least 11 months. Then he can count on receiving annual vacation pay.

4

Now the average daily earnings received must be multiplied by the number of compensated vacation days. Usually it is 28 days.

5

As a rule, the main difficulties arise with the calculation of compensation for unused vacation for an incomplete period. For example, if an employee worked for 10 months 16 days. In this case, vacation compensation is paid in proportion to the number of days in the months worked. Surpluses (in the example, this is 16 days) are rounded up to a full month, since they make up a large half of the month. If they are less than half a month, then they must be excluded from the calculations.

6

Compensation for unused vacation for an incomplete period is calculated in the amount of average earnings for 2.33 days (the value is calculated as the ratio of 28 days to 12 months) for each month of work. The formula for the calculation can be represented as ((employee income for the billing period / 29.3) / (12 * 2.33 * the number of full months worked)).

note

In some cases, it is not allowed to replace vacation with monetary compensation. This rule applies to pregnant women, minors and workers in hazardous industries.

Useful advice

Since 2014, the average number of working days is 29.3, and not 29.4 as it was before. This coefficient is fixed by law.