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Method for determining employee leave compensation in the year 2025

Upon termination of an employment, an employee is entitled to certain payments. Besides the wage for the worked days in the current month, the employer is obligated to transfer a compensation for unutilized vacation days to the employee. This aspect in the termination settlement frequently...

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Upon Job Termination, Employees are Eligible for Certain Payments. Besides Salary for the Current...
Upon Job Termination, Employees are Eligible for Certain Payments. Besides Salary for the Current Month's Work, the Employer is Required to Remunerate the Employee for Untouched Vacation Days. These Calculations Frequently Cause Disagreements Between Parties due to Inaccuracies, which can Lead to Decreased Compensation. An Examination of How to Determine Vacation Payment at Termination and Common Mistakes Made...

Method for determining employee leave compensation in the year 2025

To tackle the topic of compensation for unused vacation days, it's essential for every job-leaver to have a clear understanding of this concept. Although math whizzes may find the calculation simple, navigating the tricky waters of practice can lead to significant errors, as pointed out by Max Lownman, a legal eagle specializing in strategic business affairs.

These oversights can cause quite a commotion, leading to labor disputes and even lawsuits. It's frustrating for both sides when things don't add up, and it's your right to know your entitlements.

Compensation for unused vacation at departure is a monetary payment employers are obligated to make to their exiting staff for all unused vacation days they've accumulated. The law is tight on this one, and the basis is solid, enshrined in Article 127 of the Labor Code of the Russian Federation.

Now, let's address who's entitled to receive this compensation. All folks employed under a labor contract have this right, regardless of the circumstances behind the termination of their employment. No worthless limitations on this payout!

Compensation is handed over, regardless of how the parting transpires:

  1. By your own free will
  2. At the employer's initiative
  3. Through agreement between you and your employer
  4. Due to the contract's expiration or any other reasons.

However, there are a few exceptions. Here are the main scenarios when the employer won't fork over the dough:

  • You used all of your remaining vacation days prior to dismissal. No rest for the wicked!
  • You worked less than half a month. You can't earn a day off when you haven't even put in enough time.
  • You worked under a civil law contract. Sorry, no since labor laws apply here.

To calculate the compensation, you'll need the following documents:

  • Termination notice
  • Time tracking chart
  • Wage information
  • Certificate of used vacations
  • Information on overtime work

Here's the formula for calculating the compensation:

Compensation = Number of unused vacation days x Average daily wage

Calculating the average daily wage:

  • Total payments for the past 12 months
  • Divided by 12
  • Divided by the legally established average number of monthly calendar days (29.3)

Let's use Petrov I.I. as an example. Leaving on May 20, 2025, he started working on February 20, 2024, which means he's worked for exactly 15 months.

Step 1: Determine the number of leave days the employee is entitled to.

  • For a full year: 28 days
  • For 3 months: 28 x 3/12 = 7 days
  • Total: 35 days of leave

Step 2: Check the days already used.

  • Let's say Petrov was on vacation in the summer of 2024 for 14 days.
  • 21 days remain for which compensation is due.

Step 3: Calculate the average daily wage.

  • Salary: 50,000 rubles
  • Allowance for expanded duties: 5,000 rubles
  • Quarterly bonuses: 30,000 x 4 = 120,000 rubles
  • Total payments: 665,000 rubles

Average daily wage: 665,000/12/29.3 = 2,219 rubles

Step 4: Calculate the leave compensation

21 days x 2,219 rubles = 46,539 rubles

Step 5: Consider the compensation for overtime work.

  • Let's assume there are 12 hours of overtime work in the last 3 months.
  • Hourly rate: 50,000/160 = 312.5 rubles
  • Overtime: 312.5 x 1.5 = 468.75 rubles x 12 = 5,625 rubles

Leave: 46,539 rublesOvertime: 5,625 rubles

Total: 52,164 rubles (before tax)

key factors affecting the size of the compensation:

  • Worked days
  • Used vacation days
  • Presence of additional leave (e.g., harmful conditions, disability, etc.)

Workers in specific industries, such as chemicals, mining, or dangerous workplaces, may be entitled to additional vacation, depending on the conditions and internal regulations. Likewise, those living in the Far North and equivalent regions may acquire extra vacation days. Minors (under 18) have a general vacation of 31 days. Disabled workers may also have the right to additional vacation under certain conditions.

Another factor that may affect the compensation for unused vacation is taking vacation on your own account. If you've taken more than 14 days, any excess days will not be counted towards your service period entitling you to vacation. This means the vacation you'll receive during your tenure and the compensation upon departure will be reduced accordingly.

Labor disputes over compensation payments are taken care of without paying state duty. As of September 1, 2025, some changes will arrive with the new Regulation on the Calculation of Average Wages, which will impact the calculation of vacation compensation. Stay tuned for more details!

Science plays a vital role in understanding and navigating the complexities of workplace-wellness, including the calculation of compensation for unused vacation days. For instance, the formula for calculating such compensation relies on statistical data such as average daily wages and the legally established average number of monthly calendar days.

Embracing a health-and-wellness approach, employers can ensure a more harmonious workplace by being transparent about entitlements and providing timely compensation for unused vacation days, fostering a culture of fairness and care for their employees.

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