An example of calculating vacation pay in 2020

Olga Bondarenko

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The vacation campaign will begin soon, so we decided to remind you of the main nuances of calculating vacation pay.

As before, when calculating the amount of vacation pay, you must be guided by the norms of the Law of Ukraine “On Vacations” dated November 15, 1996 No. 504/96-VR and the Procedure for calculating the average salary approved by the Cabinet of Ministers of Ukraine dated February 8, 1995 No. 100.

Determining the billing period

According to clause 2 of Procedure No. 100, when calculating the average salary for paying for annual and additional vacations, the calculation is made for the last 12 calendar months that precede the month the vacation was granted. That is, if an employee plans a vacation in June 2020, vacation pay must be calculated for the period from June 1, 2020 to May 31, 2018.

If the employee has not worked a full year, the calculation includes the period from the first day of the month following the month of hiring until the first day of the month in which the leave is granted. For example, an employee was hired on August 11, 2020, and goes on vacation from May 18, 2020. The calculation period for calculating the average daily wage is from 09/01/2017 to 04/30/2018.

Vacation pay is calculated in calendar days. The billing period does not include holidays and non-working days, which are provided for in Article 73 of the Labor Code. To date, there are 11 holidays and non-working days. The calculation also does not include the time when employees did not work for valid reasons and their earnings were not retained. In particular, this applies to the time spent on leave without pay, parental leave for up to three and up to six years.

How to calculate vacation pay

The basis for calculating vacation pay is the manager’s order to grant leave to an employee in form No. T-6 “Order (instruction) on granting leave to an employee” or in form No. T-6a “Order (instruction) on granting leave to employees.” The calculation is usually drawn up in a special unified form No. T-60 “Note-calculation on granting leave to an employee.” These forms were approved by Decree of the State Statistics Committee of Russia dated January 5, 2004 No. 1.

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Payments that are taken into account to calculate the average daily wage for calculating vacation pay

The next step when calculating vacation pay is to determine the income that is included in the calculation of the average daily wage. According to paragraph 3 of Order No. 100, the following payments are included in the calculation:

basic salary;
additional payments and allowances (in particular for length of service, hazardous working conditions, for overtime work, work at night and on holidays; for combining professions and positions; for expanding the service area, for the complexity and intensity of work, for performing the duties of temporarily absent employees, for leadership);
production bonuses and bonuses for saving specific types of fuel, electricity and thermal energy. Bonuses must be included in the earnings of the month in which they were posted on the payroll. That is, if a bonus for May was paid in June, then when calculating the average daily wage, this amount must be taken into account in June;
bonuses based on the results of the year and for length of service. This remuneration is entered into the calculation by adding 1/12 of the bonus amount to the earnings of each month of the billing period. Please note that the bonus must be accrued in the current year for the previous calendar year.
payments when the employee retained his average earnings (salary for the duration of the business trip, vacation pay amounts and payment of sick leave).

New in calculating vacation pay in 2017

Let's consider the category of those vacations that have a paid basis. It is in relation to such groups that a special system for calculating monetary amounts is used. What examples of calculating vacation pay in 2020 are used?

As is known, the system of legal norms is prone to change. Quite often, various amendments are made to acts of this type. But, if we take the complex for calculating vacation pay, then over the last year it has not undergone any changes. That is, all formulas and principles remain the same. But don’t assume that everything is quite simple here. Even without amendments, the system is quite complex.

As a rule, the calculation of the amount of vacation pay is carried out by the accounting department of the enterprise. It is these employees who carry out all the calculations and display the specific amount that each citizen receives when going on legal vacation. But, knowing the formula that is used for such actions, you can calculate everything yourself. Thus, it is possible to find out in advance how much payment you will have to spend your vacation on or to check the accuracy of the accountants’ calculations.

A sample calculation of vacation pay in 2020 begins with the following formula:

O = OD * DO, where:

O - vacation pay,
OD – vacation pay per day;
BEFORE – vacation days (their number).

At the same time, the first indicator has its own counting system:

OD = ZP / KD, where:

Salary – wages for the period that the citizen worked from the last vacation;
CD – the number of days of such a period.

Let's consider the last indicator, since today it has a certain form for calculation. It is to this part of the calculation that a change has been made in recent years:

KD = KM * PD, where:

KM – number of full months;
PD – days worked.

Moreover, if the number of months depends on how long the citizen was not on vacation, then PD is a stable indicator. Today it is 29.3. This number represents the average number of days in each month, taking into account the entire year. That is, we do not take a separate number for each month, such as 3, 31 or 28, but use exactly this number.

Determining the average daily salary and calculating the amount of vacation pay

Payments that are taken into account when calculating the average salary are included without taking into account taxes and alimony. To determine the average daily earnings, you need to divide the amount of income accrued during the billing period by the number of calendar days in this period (excluding holidays and non-working days established by law). The result obtained must be multiplied by the number of calendar days of vacation. If holidays occur during the vacation period, they are not paid, and the period of vacation is extended.

It should be noted that if during the calendar year before the month of vacation the company increased wages, the average earnings should be adjusted by the increase factor. The increase coefficient is determined by dividing the official salary established for the employee by the official salary in force before the increase. There should be as many adjustment factors as the number of times the salary was increased in the billing period.

At the same time, vacation pay is not adjusted if the employee is transferred to another position with a higher salary.

Vacation in 2020 - features of taking a vacation

In order to determine the amount of remuneration, you first need to analyze the complex of vacation periods itself. The calculation of the benefit amount and the principle of its determination depend on this. What is a vacation? This is the period provided for in regulatory legal acts during which the employee is allowed not to report to his place of work. The main purpose of this legal phenomenon is rest.

So, everyone who works 5 days a week, or even more, must have a special time during which he will be released from work duties. In this case, it is worth talking about social protection of citizens in the labor sphere. The right to use vacation is inalienable and cannot be absent due to the will of the employer.

The only exception is the desire of the employee himself. Thus, based on the presence of certain reasons, he can refuse the vacation period and continue to fully perform his labor functions. The employer cannot force him to do anything differently. The right to use or not use vacation belongs exclusively to the employee and no one else. Therefore, the will must come exclusively from him.

In this case, a special procedure is used, which consists of submitting an application and issuing an order. Thus, an employee who wishes to take a break and has every right to do so must submit a special application to his management for the use of vacation. You can download a sample of such a document from us:

Sample application for leave

It indicates the period during which the citizen plans to be absent from the workplace, as well as information about whether the leave is paid or at his own expense.

Based on such a statement, management issues a special order. It clearly indicates the date from which the citizen goes on vacation and on what day he is obliged to report to his workplace. This procedure is important, since without the issuance of a corresponding order by management, the absence of an employee from his place may be considered absenteeism. Accordingly, the boss will be able to dismiss the subordinate in the future on his own initiative.

The entire vacation can be divided into two categories:

paid;
at your own expense.

The first is characterized by the fact that the entire duration of rest according to a special system is calculated in monetary terms. In the future, this amount is transferred to the employee to spend his legal days off. Thus, in regulatory legal acts, a specific duration of vacation is established for all categories of employees. It is provided once a year and must be paid for by the management of the organization or enterprise.

But, there are cases when the rest period is not sponsored by the employer. Such situations include:

use of days that go beyond the amount of the vacation period. Thus, sometimes some citizens take a vacation for a longer period than is provided for by law. In this case, if the management of the enterprise or organization has nothing against this vacation, every day that goes beyond the vacation is not paid by the employer;
if the vacation was not taken at the time indicated according to the special schedule. So, in most companies, employee rest has its own schedule. This especially applies to those enterprises where continuous production takes place. In this case, in order to ensure that the vacation does not harm the organization’s activities, special schedules of employee vacation periods are drawn up. Therefore, if, for certain reasons, a citizen needs to take a vacation outside of his turn, he applies for a vacation at his own expense.

As you can see, there are features here and it’s worth remembering them. Therefore, it is very important to first familiarize yourself with all the nuances so as not to violate either the rights of the employee or the employer.

An example of calculating vacation pay if twelve months have not been worked before the vacation.

The employee was hired on December 2, 2017 with a salary of 5,000 UAH. From June 5, 2018, she was granted leave for 10 days. During the billing period from January 1, 2018 to May 31, 2018, the employee was credited with UAH 25,000.

Let's determine the number of calendar days in the billing period. In the period January-May 2020 (151 calendar days) there are 7 holidays: January 1, January 7, March 8, April 8 (Easter), May 1, May 9, May 28 (Trinity).

Let's calculate the average daily wage:

25000.00 UAH: (151-7) cal. days = 173.62 UAH.

The amount of vacation pay will be:

173.62 UAH * 10 days. = 1763.20 UAH.

Holiday pay accruals under various circumstances

It would seem that determining the amount of payments is not so difficult. However, some cases require special consideration. Often, company employees are unable to perform their duties due to illness or personal circumstances. In this case, the missed days are subtracted from the formula. For example, employee N. was on sick leave from April 1 to April 10, 2020 and missed 10 working days.

The total number of days in a month is 30. We count: 30-10=20 – that’s how many days N. worked. Now let's calculate the total number of calendar days using the formula: 29.3/30*20. We get 19.5. Let's substitute these data into the general formula: salary / (11*29.3+19.5). The resulting number will be the average daily salary for the billing period.

An employee’s salary can also be indexed. This happens in cases where the salaries of all company employees increase. In such a situation, the indexation coefficient should be calculated. To do this, we divide the remuneration after the salary increase by the salary before indexation. For example, for 10 months, employee M. received 30,000 rubles. After the wages of the company's employees increased, M.'s salary amounted to 35,000 rubles.

For the entire year, M. never took time off or went on sick leave. So, we calculate: 35,000 : 30,000 = 1.2. This is the indexation coefficient. We substitute it into the formula: 10*30,000*1.2+2*35,000 = 430,000. We received M.’s total earnings for the year. Now let’s determine the employee’s average daily earnings: 430,000: 12: 29.3 = 1,222. Multiply this number by the number of vacation days and get the total amount of vacation pay. If only one employee’s salary was increased, the indexation coefficient is not included in the calculation.

With an increase in salaries in the company, the employee’s salary is indexed

An example of calculating vacation pay if there is no earnings for good reasons

The employee was on maternity leave for up to three years until 06/11/2018 and from 06/12/2018 she goes on a 21-day tariff leave. At the end of maternity leave, the employee’s salary is set at UAH 4,700.

The amount of earnings for the year is determined conditionally:

4700.00 UAH * 12 months. = 56400.00 UAH.

Number of calendar days in the billing period:

365 cal. days – 11 holidays days = 354 cal. day.

The average daily wage will be:

56400.00 UAH: 354 cal. days = 159.32 UAH and, accordingly, the amount of vacation pay:

159.32 UAH * 21 cal. days = 3345.72 UAH.

Changes in the payment system

Last year, the procedure for calculating vacation pay changed slightly.

Firstly, when determining an employee’s average daily earnings, the salary indexation coefficient must be taken into account. We will tell you how to calculate it and apply it in formulas a little later.
Secondly, income tax on vacation pay must now be paid not on the day the funds are received, but no later than the last day of the month of their transfer. At the same time, a new reporting form 6-NDFL was introduced.
Thirdly, vacation pay must be transferred to the employee 3 days before he goes on vacation.

How to calculate vacation time

The amount of vacation pay depends mainly on the number of vacation days. This period in budgetary organizations is established by the Labor Code, but private companies can make their own amendments. The total number of vacation days per year must be indicated in the employment contract, usually it is 28 days, but in the case of private employees there may be other figures. For workers engaged in work in hazardous conditions or remote areas, increasing factors apply, so their vacation may be longer than standard.

The calculation of days is carried out using a simple formula: the number of total months worked in the current year must be divided by 12, and the resulting amount multiplied by 28. The result reflects the number of vacation days.

At the same time, the Labor Code provides a list of conditions under which specific days are not taken into account when determining the duration of vacation. For example, if an employee was absent from work for a week due to illness, which is confirmed by a sick leave certificate, then this period will not be taken into account when calculating the vacation period. Thus, the duration of rest may be reduced.

It is precisely because of such nuances that it is easy to get confused when calculating, therefore, to find out exactly how many days the vacation will total, you should contact the accounting department.