What is the concept of indexation of vacation pay, and how does labor legislation view it? What variations can be found in different interpretations and what actions of the employer are permissible and illegal?
Indexing- this is a way to protect workers from inflation, which is ensured by Article 130 of the Labor Code. The purpose of indexation is to increase the purchasing power of the population; the same goal is pursued by the employer by increasing the wages of his employees.
Indexation itself does not provide an increase in income; it only helps maintain income at the level of the same purchasing power and some stability.
About salary increase
A salary increase is a change in its quantitative indicator compared to the previously existing one. The legislation does not approve a specific number or frequency of salary indexations. It is stipulated that indexation should be carried out if a price increase is officially recorded.
As Article 134 of the Labor Code states, indexation for public sector workers is established by law. Heads of commercial structures prescribe the possibility of indexation in an employment agreement or local act.
According to the written order of Rostrud dated 19/IV - 2010, if indexation is not provided for in documents, then it is subject to change in order to correct this situation.
There are cases where indexation is provided for by industry agreement. Some commercial organizations provide for quarterly indexation in proportion to the increase in prices for consumer products.
About the legislative justification
A special act dated 24/XII - 2007 will help clarify the features of calculating average earnings with a salary increase. It explains the procedure for recalculating the average salary in case of indexation. In such a situation, according to the provisions of paragraph 16 of this legal act, an increase in average earnings is required by the salary increase factor.
The list of payments subject to indexation includes:
- allowances,
- surcharges,
- bonuses that are provided for by the labor remuneration system and comply with the norms of paragraph 15 of the Regulations,
- other salary bonuses established within the company.
Only payments that depend on the size of the salary as a multiple of it and are stated in fixed percentages will need an amendment.
About the reasons for indexing
Common reasons for indexing:
- Employee salaries are below the minimum wage due to its increase.
- Rising prices for basic consumer products in the region.
- Inflation rate increases.
- An increase in the cost of living, both in Russia and in a particular region.
It should be remembered that a salary increase is not an obligation, but a right of the manager. He can increase it, regardless of conditions and factors at any time.
Most often, salaries increase when:
- growth of labor productivity of workers at the enterprise.
- increase in enterprise income.
- establishing an increase provided for by a labor, collective agreement or other legislative act.
The terms of remuneration are a mandatory clause of the employment contract, therefore, at the next indexation of wages, a new additional agreement is drawn up.
About indexation of vacation pay
As a result, when the salary level increases, other payments provided for by law will also increase. The increase occurs by a certain coefficient. The accountant takes into account all payments that are subject to increase for further recalculation of the average salary by the indexation factor.
The coefficient is determined by dividing the bet after the increase by its previous size. For an increase that occurs after the end of the billing period, but before the onset of vacation, the calculated average salary is multiplied by the resulting coefficient. If the increase in earnings occurred during vacation days, then the average amount does not increase in the period before the increase, but only from the moment of the increase until its end. Amendments are made to the recalculation of only the main part of wages, without taking into account compensation, incentives and social payments. In addition to the above, promotion is mandatory for all employees.
An example is a similar case: In July 2013, logistician S.P. Makarov went on another vacation, which lasted for 28 days. The billing period from 1/VII-2012 to 30/VI-2013 was fully worked out. The logistician's rate in 2012 was 10 thousand rubles and was increased from 1/I-2013 by 10%, while bonuses and other payments were not provided for in this billing period.
The preliminary calculation of the average salary for calculating vacation pay is the following series of calculations: the rate increase occurred in the billing period, therefore, the calculation of the average salary from July to December 2013 will increase by the payment ratio.
We divide the increased salary by the old one, we get 11,000:10,000 = 1.1. This is the coefficient required for recalculation. Average earnings per day will be (10,000x1.1x6+11,000x6): (29.3x12)=345.43 rubles. 345.43x28=10,512.04 rubles will be the amount of vacation payments.
Let's consider another example: Manager of Vysota LLC Kudashkina A.P. I went on another vacation from April 14 for 28 days. Let's see what the calculations of her average earnings should look like if there was a salary increase since 1/V-2014. The billing period is from 1/IV-13 to 31/III-14. According to the accountant's calculations, the average salary was 420 rubles. No additional payments were accrued during the billing period. Thus, vacation pay amounted to 420x28 = 11,760 rubles.
The salary was increased from May 1, accordingly, the recalculation of vacation pay should be performed for the period from this day until the end of the vacation. The calculations will look like this: the vacation was 15 days in April and 13 May. Then the new vacation pay will be calculated using the following formula: 15x420+13x420x1.2=12,852 rubles.
As can be seen from the examples given, the amount of vacation pay depends on the period in which indexing was carried out, and is recalculated even if the salary increased during the vacation period.
About who is eligible for indexing
The legislation confirms that indexation is due to all employees of the organization, including:
- new employees who came to work;
- those who have been transferred to an institution or to a new position;
- those who have returned from parental leave before the age of three;
- those who combine work with study, for which they are paid a scholarship;
- part-time workers
About employees who went on maternity leave
When salary increases, indexation takes place for all employees without exception, including those on maternity leave and paid parental leave. Article 132 of the labor legislation interprets as a violation of the law, increasing wages for all employees, except those on maternity leave or parental leave.
Such facts of non-increase in wages are interpreted as an infringement of the rights of all employees and may lead to the employer being held liable. In most cases, employees are paid the required payments based on the amount of the average salary: travel allowances, vacation pay, compensation for vacation that was not used, and dismissal payments.
Directly at the moment of salary indexation, the level of its increase is taken into account. Bearing in mind that according to paragraph 16 of Article 922 of the Resolution, indexation is carried out only when it concerns all employees of the company or a certain structural unit.
Let’s assume that the company increased the wages of all employees by 20%, but the increase did not affect the woman, who was on maternity leave at that time. The manager signed the application for leave, the accountant calculated maternity payments. Without indexation, the amount of vacation pay will be significantly less than required, and the employee has the right to make a claim to the accountant.
If, after indexation, vacation pay exceeds the amount established by law, then an adjustment will be required taking into account income tax. Although there is no consensus on resolving this issue. Article 255 of the Tax Code of Russia provides a list of expenses provided for wages, but at the same time, expenses not established by law can be taken into account only if they are specified in the contract.
Overestimation of expenses by accounting will lead to a reduction in income tax, which will result in fines or penalties. In this situation, you will have to choose between increasing the salary for the maternity leave or justifying financial losses to other employees. If a woman on maternity leave is a manager, and the salaries of her subordinates have increased, then the increase is undoubtedly beneficial for her. Otherwise, after returning from maternity leave, she will receive a salary lower than that of her subordinates. The law does not insist on the mandatory establishment of a ratio between the salaries of managers and subordinates; however, if a similar situation arises, it will most likely attract the attention of inspection authorities.
About indexation when changing positions
If an employee changes position, then his average salary must be indexed, which will lead to an increase in his salary. It is also necessary to index other payments that affect the calculation of the average salary and, accordingly, vacation pay.
About repeated salary increases
If the salary is increased repeatedly during the billing period, the calculation of the coefficient will have to be performed the same number of times. In such cases, only the increase in salary amounts is taken into account; the decrease is not taken into account. It should be noted that the application of the coefficient will be subject to certain conditions.
For example, given that during the billing period there was an increase in employee salaries, it will be necessary to multiply the coefficients by the payments that were accrued to the employee before the salary increase.
About cases where vacation pay has not been recalculated
It often happens that local acts of organizations provide for an increase in salaries, but financial indicators for this procedure are not taken into account. Therefore, if an employee violates the procedure for calculating vacation pay, he or she can file a complaint with the court. And the court, in turn, will use the price increase coefficient established by the state statistical authorities. If an enterprise does not carry out salary indexation in a timely manner, its employees have the right to appeal to the judicial authorities due to violations of the law.
According to Article 134 of the Labor Code, enterprise management is obliged to index salaries taking into account rising prices for goods, essential products and services. In addition, the Labor Code requires documentary confirmation of the indexation procedure in regulations. If indexation is not documented, this does not relieve the company’s management from liability.
The amount of vacation pay is determined based on the average daily earnings for 12 months multiplied by the number of days of rest. If the employee’s payments were unchanged the entire year before the vacation, calculating the amount of vacation pay will not be difficult.
Dear readers! The article talks about typical ways to resolve legal issues, but each case is individual. If you want to know how solve exactly your problem- contact a consultant:
APPLICATIONS AND CALLS ARE ACCEPTED 24/7 and 7 days a week.
It's fast and FOR FREE!
But there are cases when an employee receives allowances, bonuses and other monetary incentives, which are also included in the remuneration system. In this case, the salary changes, just like the procedure for calculating vacation pay.
How does a change in salary affect the calculation?
The amount of benefits for temporary disability, maternity and paid days off to care for a disabled child is not taken into account.
All those payments that are included in the wage system at the enterprise are taken into account:
- additional payments, allowances;
- awards, etc.
A change in salary is always a reason for changing the amount of vacation pay. At the same time, changes are always for the better. This is justified by the fact that the salary always consists of amounts that are taken into account when determining the total estimated earnings.
Calculating vacation pay
If the incentive at the enterprise affected two or three people, then the average profit will be calculated based on the actual amounts transferred.
If tariff rates and salaries were increased for all employees in the organization, then the payments calculated before the increase will have to be indexed (RF PP No. 922 of December 24, 2007).
If the salary increase occurred during the calculated period for transferring vacation earnings, then it is necessary to multiply the payments that are taken into account when forming the average income and transferred before the salary change by a special coefficient.
If the increase occurred after the billing period, but before the start of the vacation, then it is necessary to adjust the average earnings for the billing period.
If the salary increase was carried out during vacation, then it is necessary to increase part of the vacation pay from the day the salary was increased until the day the vacation ends.
If the profit amounts were increased only once, then calculating the P coefficient will not be so difficult. It’s a different matter if earned vacation pay changed several times during the billing period.
In such a combination of circumstances, it is necessary to divide the salary, the amount of which was last changed, into each of the salaries that were in effect in individual months of the billing period.
Calculation example
Example No. 1. An employee of the Luna enterprise, D.K. Averyanov, goes on vacation from May 1 for 28 calendar days (until May 28, 2019). The billing period from May 2019 to April 2019 has been fully worked out.
The employee's salary is 20 thousand rubles, there are no additional payments. Over the past year, Averyanov’s salary was increased twice: in June 2019 to 25,500 rubles and in February 2019 until 27,454 rubles. The salary increase affected all employees of the enterprise.
The calculation of vacation pay must begin by determining the multiplying factor. The last time income was increased was in February 2019.
The salary amount for this month must be divided by the amount of payments that existed in other months of this billing period.
Thus, the coefficient will be equal to:
Using the obtained coefficients, it is necessary to index the payments that were accrued to the employee in the billing period.
The calculation will include the following amounts:
The amount of the estimated salary will be equal to 301,357 rubles. Averyanov's average daily earnings will be 857 rubles(301 .357:12:29.3). Vacation pay must be accrued for 28 days of vacation in total 23,996 rubles.
Example No. 2. Malina K.A. is an employee of the KomPress company. She goes on vacation from August 10 for 7 calendar days (until August 17, 2019).
The calculation period is 6 calendar months. The time from March 1 to July 31, 2019 was worked out in full.
Malina's salary is 15 thousand rubles. It was increased 2 times during the billing period: the first time - in May 2019 to 17,800 rubles, second time - in July 2019 until 20,000 rubles. The salary increase affected employees of the entire enterprise.
The increase factor will be equal to:
We index the payments received in this order:
The amount of the estimated salary is 75,140 rubles(30,000+23,140+22,000). Average daily earnings will be 427 rubles(75 140:6:29.3). Vacation pay must be transferred for 7 days of vacation in the amount 2,989 rubles.
Example No. 3. Grigoriev is an employee of Sberbank. His leave begins on April 7, 2019 and will last 14 days. The billing period has been fully worked out (from April 7, 2019 to March 31, 2019). Grigoriev's salary is 30,000 rubles per month.
The salary changed three times during the year:
Salary increases were carried out throughout the enterprise. It should also be noted that Grigoriev received a one-time bonus in the amount of 15 000 rubles for February 2019.
The following coefficients will be applied:
We index the received payments as follows:
The estimated amount will be 430,067 rubles(30,000+144,000+143,220+75,132+37,700+15,000). Average daily income – 1,223 rubles. Vacation pay must be transferred 14 days in advance in the amount 17,122 rubles.
What to pay attention to
If your salary has changed, it is important to pay attention to the following:
- the change in tariff coefficients affected employees of the entire enterprise or only a few individuals;
- whether there was an increase in income during the billing period;
- changes occurred before, after or during rest;
- how many times did income change during the billing period;
- are there any months in the billing period that are not affected by the salary change;
- what other one-time financial incentives were there in the billing period, with the exception of salary changes.
If the change was made to all employees, their payments for the past period must be indexed.
After indexation, employees are compensated for lost amounts of money. If the allowance, bonus or additional payment was one-time and applied to several people, then when determining average earnings, only the actually accrued amount for the past month is used.
If the salary increase occurred before the billing period, then there is no need to determine increasing coefficients.
Each employee has his own situation: someone wants to take a vacation immediately after maternity leave, someone works part-time, someone has increased their salary and received bonuses. Accounting must take all these situations into account when calculating vacation pay. In the article we will look at calculation examples. In addition, you will find convenient formulas for calculating vacation pay in non-standard situations.
To confidently calculate average earnings in the most difficult situations, register for the online course "".
Calculation of vacation pay for part-time work
Employees who work part-time are also entitled to 28 days of rest. This is confirmed by Art. 93 of the Labor Code of the Russian Federation, which prohibits introducing any restrictions for citizens who work in a mode other than the standard one.
Vacation pay for part-time work is calculated in the generally established manner (that is, for the last 12 calendar months by dividing the amount of accrued wages by the number of months of the billing period and by 29.3).
Example
From August 15, 2017, the employee was granted another vacation of 28 calendar days. Salary -18,000 rubles. From July 1, 2017, he was given a four-day working week with a payment of 14,400 rubles per month.
Let's determine the billing period: August 2016 - July 2017
The amount of vacation pay will be: (18,000 x 11 + 14,400) / 12 / 29.3 x 28 = 16,914.68 rubles
Calculation of vacation pay for salary increases
An increase in salaries (tariff rates) is taken into account when calculating average earnings (in particular, when calculating vacation pay) only if it was carried out in relation to all employees of the organization (clause 16 of Regulation No. 922).
Please note: if indexation did not affect at least one employee, then when calculating the average earnings of absolutely all employees, such a salary increase is not taken into account.
An increase in wages affects the calculation of the amount of vacation pay if the increase occurs:
- In the billing period;
- After the billing period, but before the start of the vacation;
- During vacation.
In such cases, it is necessary to use a special increase factor. Formula for calculating the coefficient of increase in tariff rates (indexation coefficient):
Tariff rate increase coefficient (indexation coefficient) = New salary (tariff rate) / Salary (tariff rate) before increase
Example
1. Salary increased in the billing period
The employee goes on vacation from October 20, 2017 for 28 calendar days. Salary - 20,000 rubles. Billing period: October 2016 - September 2017. From September 1, 2017, the employee’s salary was increased by 3,000 rubles and amounted to 23,000 rubles
Increase factor: 23,000 / 20,000 = 1.15
Amount of vacation pay: (20,000 x 1.15 x 11 + 23,000) / 12 / 29.3 x 28 = 21,979.52 rubles.
2. Salary is increased after the pay period, but before the start of the vacation. In this case, it is necessary to adjust the average daily earnings.
The employee goes on vacation from October 20, 2017 for 28 calendar days. Salary - 20,000 rubles. Billing period: October 2016 - September 2017. From October 1, 2017, the salary has been increased by a factor of 1.2.
Amount of vacation pay without recalculation: (20,000 x 12) / 12 / 29.3 x 28 = 19,112.63 rubles
Amount of vacation pay: 19,112.63 x 1.2 = 22,935.16 rubles
3. Salary increased during the vacation period. In this case, it is necessary to adjust that part of the vacation pay that falls on the vacation period from the day the salary (tariff rate) was increased until the end of the vacation.
The employee goes on vacation from October 10, 2017 for 14 calendar days. Salary - 20,000 rubles. Billing period: October 2016 - September 2017. From October 16, 2017, the salary was increased by a factor of 1.2.
To simplify the example, we assume that the billing period has been fully worked out.
Average daily income: (20,000 x 12) / 12 / 29.3 = 682.59 rubles
We calculate vacation pay for 6 calendar days of vacation before the salary increase (from October 10 to October 15, 2017) based on the actual average earnings, that is, without taking into account the salary increase:
682.59 x 6 = 4,095.54 rubles
Vacation pay for the remaining 8 calendar days of vacation (from October 16 to October 23, 2017) is accrued based on the actual average earnings, adjusted by the salary increase factor - by 1.2:
Average daily income: (20,000 x 12 x 1.2) / 12 / 29.3 = 819.11 rubles
819.11 x 8 = 6,552.88 rubles
Vacation pay amount: 4,095.54 + 6,552.88 = 10,648.42 rubles
Calculation of vacation pay in the presence of bonuses in the billing period
Bonuses when calculating vacation pay and compensation for unused vacation are taken into account in the manner prescribed by clause 15 of the Regulations on the specifics of the procedure for calculating average wages, approved by Decree of the Government of the Russian Federation of December 24, 2007 No. 922.
That is, bonuses for determining the amount of vacation pay are taken into account as follows:
- Monthly bonuses- all bonuses actually accrued in the billing period are taken into account, but not more than one for each indicator for each month of the billing period.
- Quarterly (semi-annual) bonuses- all actually accrued in the billing period for each indicator are taken into account. If the duration of the period for which they are accrued exceeds the duration of the billing period, then premiums are taken into account in the amount of the monthly part for each month of the billing period.
- Annual bonuses- taken into account regardless of the time of accrual of remuneration.
Bonuses for anniversaries and holidays are taken into account when calculating vacation pay if they are provided for by the remuneration system and accrued in the pay period (Letter of the Ministry of Labor of the Russian Federation dated August 3, 2016 No. 14-1/ОOG-7105).
When calculating a bonus based on the results of work for the year, if the year has been worked in full, the amount of the accrued bonus is taken into account when calculating the average salary in full. If the year is not fully worked, then the bonus is taken into account in proportion to the time worked in the billing period (Letter of the Ministry of Health and Social Development of the Russian Federation dated March 5, 2008 No. 535-17).
Bonuses taken into account in the calculation = Bonuses accrued to the employee in the billing period / Number of working days in the billing period x Number of days actually worked in the billing period
Example
The employee was granted another paid leave from January 9, 2017 for 28 calendar days. The billing period is from 01/01/2016 to 31/12/2016 (247 working days). In August 2016, the employee did not work because he was on annual paid leave of 28 calendar days: from August 1, 2016 to August 28, 2016 (20 working days).
During the billing period, the employee was accrued the following bonuses:
- monthly bonuses, excluding actual time worked: 5,000 rubles
- quarterly bonuses, excluding actual time worked: 10,000 rubles for the 1st quarter of 2016 accrued in April 2016; 10,000 rubles for the 3rd quarter of 2016 was accrued in October 2016.
- annual bonus for 2016, excluding actual time worked: 25,000 rubles accrued in February 2017
The amount of bonuses taken into account when calculating the average daily earnings for vacation payments is:
(5,000 x 12 + 10,000 x 2 + 25,000) / 247 x 227 = 96,497.98 rubles.
Calculation of vacation pay after maternity leave
If an employee goes on annual paid leave immediately after maternity leave, then, according to clause 6 of the Regulations on the specifics of the procedure for calculating average wages, if in the calculation period there was no income included in the calculation of average earnings to pay for vacations, then the specified period must be replaced for 12 months preceding the month in which the employee went on maternity leave (Letter of the Ministry of Labor of the Russian Federation dated November 25, 2015 No. 14-1/B-972).
The period of being on parental leave is not counted towards the length of service giving the right to annual paid leave, but maternity leave is counted towards the length of service.
Vacation pay in this situation will be calculated based on earnings for the 12 months preceding maternity leave.
Example
The employee was:
- on maternity leave from April 2014 to August 2014,
- on parental leave for up to three years, from August 2014 to June 2017.
After the end of maternity leave, the employee took leave for 28 calendar days.
Since during the billing period the employee did not have any income included in the calculation of average earnings for calculating vacation pay, then to calculate vacation pay, we must take the period of 12 months preceding maternity leave, from April 2013 to March 31, 2014.
Employee salary - 20,000 rubles
Vacation pay amount: 20,000 x 12 / 29.3 / 12 x 28 = 19,112.63 rubles.
Calculation of vacation pay for summarized accounting of working hours
When accounting for working time in total, vacation pay and compensation payments for unused vacation must be calculated based on the average hourly earnings using the formula:
Average hourly earnings = Wages actually accrued during the pay period / Number of hours actually worked during the pay period
Average earnings for the period:
Average earnings = Average hourly earnings x Number of working hours according to the employee’s schedule in the period subject to payment
Example
The organization maintains summarized records of working time for a 40-hour work week. The accounting period is 1 month. The employee was on a business trip on January 16 and 17, 2017. These days must be paid to him based on his average earnings. Monthly salary: 50,000 rubles. Billing period: January 2016 - December 2016.
The number of working hours in the billing period is 1974 hours.
Earnings for the year: 50,000 × 12 = 600,000 rubles
Average hourly earnings: 600,000 / 1974 = 303.95 rubles/hour
Number of working hours in the period for which average earnings are paid:
40 hours / 5 days × 2 days = 16 hours
For 2 days during which the employee was on a business trip, he must be paid:
303.95 × 16 = 4,863.20 rubles.
Calculation of vacation pay for seasonal work and short-term employment contracts
Employees who have entered into an employment contract for a period of up to two months (Article 291 of the Labor Code of the Russian Federation) and employed in seasonal work (Article 295 of the Labor Code of the Russian Federation) are paid vacation at the rate of two working days per month of work. Article 139 of the Labor Code establishes that for such categories of workers, the average daily earnings are determined by dividing the amount of accrued wages by the number of working days according to the calendar of a six-day working week.
Average daily earnings = Earnings included in the calculation / Number of working days according to the calendar of a six-day working week
Example
A fixed-term employment contract was concluded with the employee for two months - from March 1 to April 30, 2017. The employee has the right to leave in the amount of four days (2 months x 2 days). The amount taken into account for vacation pay is 100,000 rubles.
The number of working days according to the six-day working week calendar in the billing period was:
- March - 26 days;
- April - 25 days;
The total number of working days is: 26 + 25 = 51 working days
Average daily earnings: 100,000 / 51 = 1,960.78 rubles
Amount of vacation pay: 1,960.78 x 4 = 7,843.12 rubles.
Ostrovskaya A. Z., leading tax consultant, Tax Optima Consulting Group LLC
Magazine "Accounting in Construction" No. 8, August 2010
During the vacation period, accountants of construction companies often have problems with calculating vacation pay related to specific circumstances, for example, with the indexation of average earnings. There are some nuances to consider here...
Salary increases should be general
Let us remember that in some cases it is necessary to determine the average salary of an employee. The most common reasons for this are vacations and business trips.
While on vacation, a person is entitled to income calculated on the basis of average earnings for the previous 12 months. The same is true with business trips (Articles 114, 139, 167 of the Labor Code of the Russian Federation).
The specifics of calculating average earnings are defined in the Regulations approved by Decree of the Government of the Russian Federation of December 24, 2007 No. 922 (hereinafter referred to as the Regulations).
This document also regulates the calculation procedure for salary increases. In this case, the average salary is subject to indexation by an increase factor.
That is, if the organization has increased tariff rates (salaries) and monthly payments to them, the average earnings are indexed - according to the rules of paragraph 16 of the Regulations. The indexation coefficient takes into account the increase in both tariff rates and monthly payments to them. After all, when calculating average earnings, all payments provided for by the organization’s remuneration system are taken into account. These include: ; allowances and additional payments for professional skills, length of service, combination of jobs, working conditions, etc.; bonuses and rewards, etc.
The coefficient is calculated using the formula:
K = NRO/PRO,
Where TO– conversion factor;
NRO– the new amount of salary (tariff rate, monetary remuneration) and monthly additional payments (allowances) in the month when the last increase occurred;
PRO– the same amount of salary (tariff rate, monetary remuneration) and monthly additional payments (allowances).
Please note: this procedure is applicable only in cases where the change in payment occurs on a mass basis - throughout the organization, its branch or structural unit (department, section, etc.).
At the same time, if we are talking about a personal increase in salary for an individual (for example, a specialist after completing a probationary period or an employee in connection with a transition to a new position), then this does not entail the use of an increasing factor when calculating vacation pay.
In this case, vacation pay will be calculated from actually accrued income without adjustment (letter of Rostrud dated October 31, 2008 No. 5920-TZ).
Please note: for part-time workers, the average salary is determined in the same manner as for main employees (clause 19 of the Regulations).
If leave is granted to an internal part-time worker, then the average salary is calculated for both the main and part-time positions.
Indexing order
The recalculation of average earnings depends on the moment at which salaries increased.
Increase in salary in the billing period
First, let's consider the situation when the increase occurred in the billing period, that is, in the period for which average earnings are calculated - the previous 12 months.
Let us immediately note that the indexation procedure (clause 16 of the Regulations) used in this situation was amended by Decree of the Government of the Russian Federation of November 11, 2009 No. 916.
As before, it is necessary to index payments that are taken into account when determining average earnings that were accrued in the billing period for the period of time preceding the increase. Their increase by the indexation factor was provided for earlier. But with regard to the calculation of the coefficient, some changes have occurred.
Before the clarification, the coefficient was determined as follows: the amount of salary established in the month of occurrence of the event that is associated with the preservation of average earnings was divided by the salary established in each month of the billing period.
Now it’s different: the amount of salary established in the month of the last salary increase is divided by the salary established in each month of the billing period. That is, the unique equivalent is not the last month of work, but the last salary increase.
As you can see, the wording has changed fundamentally. The new version of paragraph 16 of the Regulations brings clarity to the procedure for calculating the coefficient in a situation where in the billing period there is first an increase in salary and then a decrease. Which, unfortunately, is quite possible during a crisis.
The previous edition did not allow us to understand how the indexation coefficient should be determined in this case? And should it be calculated at all if, for example, in the month the employee went on vacation, the salary was lower than originally established? That is, there was no clear calculation procedure.
At present, there is no ambiguity: the coefficient is calculated based on the last increase in salary (tariff, etc.) and it is applied to payments for the period preceding this increase. In other words, indexation for the corresponding period is also carried out in the case when, at the time the employee goes on vacation, his salary is lower than the previously established values.
Example 1. Installer of Altair LLC Sokolov V.L. From June 21, 2010, he went on vacation for 14 calendar days. The calculation period for determining average earnings is the period from June 1, 2009 to May 31, 2010. Let us assume that he worked out the entire billing period in full.
Sokolov’s salary (taking into account changes in the organization as a whole related to its financial situation) was:
The procedure for calculating average earnings will be as follows.
In the month of the last salary increase, its size was 30,000 rubles. Therefore, the coefficient is calculated using the formula given above (to simplify the example, we will assume that there were no other payments):
30,000 rub. : 23,000 rub. = 1.304.
Salaries for the months preceding the increase (from June 2009 to September 2009 inclusive) must be adjusted by this amount. Consequently, the amount of payments taken into account when calculating average earnings will be 344,968 rubles. (23,000 rubles x 4 months x 1,304 + 30,000 rubles x 5 months + 25,000 rubles x 3 months).
Let's determine the average daily earnings:
RUB 344,968 : 12 months : 29.4 = 977.80 rub.
The amount of accrued vacation pay will be equal to 13,689.2 rubles. (977.80 rub. x 14 k. days.).
Increase in salary in the month of vacation
Salaries for an organization (branch, department) can be increased after the pay period. In this case, two options are possible:
– the increase occurred before the start of the vacation (if the vacation, for example, does not start on the 1st day of the month);
– the increase occurred while the employee was on vacation.
In both cases, the average salary is also subject to indexation by a conversion factor, which is calculated simply: the new salary is divided by the old salary amount.
Option I. In the first situation, the entire average earnings calculated for the billing period are increased by the conversion factor.
Example 2. Master of Mars LLC Balkin S.P. went on vacation from June 7, 2010 for 14 calendar days. His salary in the billing period was 25,000 rubles, and from June 1, salaries across the organization were increased (for foremen - up to 30,000 rubles).
The indexation coefficient will be equal to 1.2 (30,000 rubles: 25,000 rubles). Balkin worked out the billing period completely. His average daily earnings (including indexation) will be 1020.41 rubles. (RUB 25,000 x 12 months x 1.2 / 12 months: 29.4).
And vacation pay will be accrued in the amount of 14,285.74 rubles. (RUB 1,020.41 x 14 days).
Option II. The salary increase occurred during vacation. In this case, separate calculations will be required.
Example 3. Let's use the initial data of example 2, but change its conditions. Master Balkin went on leave from June 28, 2010 for 14 days, and his salary was increased from July 1, 2010. Only the July part of vacation pay needs to be indexed.
The calculation will be made as follows.
Vacation pay was accrued to Balkin (without indexation, since at the time of calculation there was no order):
25,000 rub. x 12 months : 12 months : 29.4 x 14 days. = 11,904.76 rub.
After the employee returned from vacation, he was recalculated.
25,000 rub. x 12 months : 12 months : 29.4 x 3 days. = 2551.02 rub.
25,000 rub. x 12 months : 12 months : 29.4 x 11 days. x 1.2 = 11,224.49 rubles.
The total amount of indexed vacation pay is 13,775.51 rubles. (2551.02 + 11,224.49). Balkin was additionally charged 1870.75 rubles. (13,775.51 – 11,904.76).
Clarifications for calculating the coefficient
In addition to the wording changes we discussed above, there is another important amendment.
Changing the list of additional payments does not prevent indexation
Thus, at the end of paragraph 16 of the Regulations a paragraph has been added, the essence of which boils down to the following. If the company, in addition to the salary, has established additional monthly payments, the list (or amount) of which changes when salaries are increased, then the coefficient is calculated taking into account these allowances. That is, the total amount of the new salary and allowances (according to the amended list) must be divided by the amount of the previous salary with previously established allowances.
In this case, a situation may arise when the indexation coefficient does not have to be applied, despite the increase in salaries.
For example, if salaries were increased by, say, 20 percent, while at the same time reducing the monthly bonus paid on salary by an amount equivalent to the salary increase. Dividing the new salary (increased salary plus reduced bonus) by the previous salary (salary plus bonus), we get a coefficient equal to 1. Since there was no actual increase in earnings, there is no need to index anything.
Companies paying additional amounts (other than salary) should remember that not all payments taken into account when calculating average earnings need to be adjusted by the calculated increase factor (exceptions are also set out in clause 16 of the Regulations).
The following are not subject to adjustment when recalculating average earnings:
– payments established in relation to tariff rates, salaries (official salaries), monetary remuneration in a range of values (interest, multiple);
– payments taken into account when determining average earnings, set in absolute amounts.
Therefore, if, for example, along with the salary, employees are paid permanent bonuses, which are determined in absolute amounts (that is, in specific amounts) that do not depend on the salary, then when calculating vacation pay, there is no need to apply a conversion factor to such bonuses (they are not indexed).
It happens that a company pays bonuses set as a percentage, but based on a different indicator (not salary), for example, a bonus in the form of a certain percentage of the amount of work performed. Do these premiums need to be indexed?
Indeed, from paragraph 16 of the Regulations it clearly follows that when increasing, only those payments that are tied to tariff rates, salaries, and monetary remuneration are taken into account. Thus, for the indexation of payments, it is important not only the fact that they are established in a fixed amount (interest, multiple), but also the dependence on the amount of salary (rate, monetary remuneration). Consequently, payments depending on other indicators are not subject to adjustment when salaries increase in the organization.
Let us note that a similar conclusion is contained in the letter of the Ministry of Health and Social Development of Russia dated June 26, 2008 No. 2337-17.
Important to remember
When tariff rates (salaries) are reduced, the average earnings calculated for calculating vacation pay are not subject to adjustment (earnings are indexed only upward). That is, in this case, the average earnings are not reduced by adjustment, and all payments that are taken into account when calculating the average earnings are taken into account in the actual amount.
Earnings are indexed only with a massive increase in pay
For part-time workers, the average salary is determined in accordance with the general procedure
Payments set in absolute amounts are not adjusted
Most accountants, after indexing wages, encounter some difficulties when calculating vacation payments to employees due to changes in the mechanism for calculating average earnings for the period. In this article we will look at the features of these calculations.
Calculation of average earnings to determine the amount of vacation pay
The procedure for calculating average employee earnings is spelled out in detail in the Regulations of the Government of the Russian Federation, adopted on December twenty-four, 2007 (number nine hundred twenty-two). The document prescribes an increase in payments taken into account when determining average earnings by a special coefficient if the organization has indexed salaries or tariff rates. This coefficient is usually called the conversion factor; its size is determined as follows:
KP = ZPP / ZDP
KP – increase coefficient;
ZPP – the average salary of an employee after a promotion;
ZPA is the average salary of an employee before promotion.
The procedure for recalculating vacation pay depends on the moment at which wages were indexed at the enterprise. There are four main options, involving different schemes for recalculating vacation pay:
- The situation when the salary increase was carried out in the billing period. In this case, all payments taken into account in the billing period that occurred before the salary indexation (with the exception of payments that are not subject to adjustment under current legislation) must be increased by the conversion factor.
- A situation where the salary increase occurred before the start of the vacation, but after the expiration of the billing period. With this option, the entire calculated amount will be increased by the conversion factor (except for payments that are not subject to adjustment).
- A situation where an increase in wages occurred during vacation. In such a case, the average earnings for the vacation period that passed before the indexation are not subject to change, and the earnings are increased by a conversion factor from the day the indexation came into force for the enterprise until the end of the vacation period.
- A situation where the promotion took place after the employee returned from vacation. In this case, no recalculations are made.
Dependence of the calculation of vacation pay on the period of wage indexation at the enterprise
When was indexing carried out? | Salary indexation was carried out BEFORE the onset of vacation, during the billing period | Salary indexation was carried out BEFORE the holiday, but after the end of the billing period | Salary indexation was carried out DURING vacation | Salary indexation was carried out AFTER the employee returned from vacation |
| What amount is subject to recalculation? | Average earnings for the entire period before indexation (excluding amounts of payments not subject to indexation) | the amount of “vacation pay” for the entire vacation period (excluding amounts of payments not subject to indexation) | the amount of “vacation pay” for vacation days, starting from the day of indexation (excluding amounts of payments not subject to indexation) | the amount of “vacation pay” cannot be recalculated |
What amounts are not adjusted when recalculating vacation pay?
Let's look at what amounts are not adjusted when calculating vacation payments:
- Cash payments that are set in relation to the tariff rate, salary or other types of remuneration in a specific range of values (in the form of a multiple, percentage of salary, etc.);
- Cash payments that are taken into account when calculating the average “salary” if they are set in an absolute amount (for example, various compensations: for travel, for food, permanent bonuses set in a specific amount)
Examples of calculating vacation pay in various situations
Example #1. Indexation occurred during the billing period
In August 2015, forwarder of Freight Support LLC V.P. Petrov took another paid leave for 3 weeks (21 calendar days). The billing period will be the period from August 1, 2014 to July 31, 2015. The employee worked fully for the entire period. The salary in 2014 was fixed, the salary was 20,000 rubles. From 02/01/15, salaries for all company employees were increased by 15%, and indexation took place. The new salary was 23,000 rubles. Forwarder Petrov's employment contract does not provide for bonuses.
Since indexation occurred from February 1, 2015, the accountant must calculate the conversion factor: KP = 23000/20000 = 1.15
To calculate the average salary in the period before indexation (August 2014 – January 2015), we will use the KP:
Average earnings per day = (20,000 * 1.15 * 6 + 23,000 * 6) / (29.3 * 12) = 276,000 / 351.6 = 784.98 rubles
Vacation payments for 21 days will be:
784.98*21 days = 16484.58 rubles
Example #2. Indexation occurred after the billing period, but before the onset of vacation
In August 2015, the driver of Cargo Support LLC A.S. Filimonov took another paid vacation for 2 weeks (14 calendar days). The billing period will be the period from August 1, 2014 to July 31, 2015. The employee worked fully for the entire period. The salary in 2014 was fixed, similar to the salary of freight forwarders, the salary was 20,000 rubles. From August 1, 2015, salaries for all company employees were increased by 15%, and indexation took place. The new salary was 23,000 rubles. The driver Filimonov’s employment contract also does not provide for bonuses.
Since indexation has occurred since August 1, 2015, the accountant must calculate the conversion factor: KP = 23000/20000 = 1.15
To calculate the average salary for the entire period, we will use the KP:
Average earnings per day = (20,000 * 1.15 * 12) / (29.3 * 12) = 276,000 / 351.6 = 784.98 rubles
Vacation payments for 14 days will be:
784.98*14 days = 10989.72 rubles
Example No. 3. Indexation occurred during vacation
On August 10, 2015, transport manager of Cargo Support LLC R.D. Somov took another paid vacation for 1 week (7 calendar days). The billing period will be the period from August 1, 2014 to July 31, 2015. The employee worked fully for the entire period. The salary in 2014 was fixed, similar to the salary of freight forwarders, the salary was 20,000 rubles. From 08/15/15, salaries for all company employees were increased by 15%, and indexation took place. The new salary was 23,000 rubles. The transport manager's employment contract also does not provide for bonuses. Vacation pay paid before the start of the vacation amounted to:
(20000 * 12) / (29.3 * 12) * 7 days = 4778.15 rubles
Since indexation occurred from 08/15/15, the accountant must calculate the conversion factor: KP = 23000/20000 = 1.15
To recalculate vacation payments for 2 days of vacation (August 15 and 16, the vacation period from the date of indexation), we will use the CP:
Vacation payments will be:
682.59 *5 days + 682.59 *1.15 *2 days = 4982.90 rubles
Key points when indexing vacation payments
When recalculating vacation payments, be sure to take into account several points:
- A reduction in wages for an enterprise does not have a “retroactive effect” (indexation can only be for an increase), i.e. the average earnings calculated for the issuance of vacation pay are not adjusted downward; all payment amounts must be taken into account according to the actual value.
- Indexation is only considered to be an increase in wages for the entire enterprise, branch, division, and not for some part of the staff.
- The system for calculating average earnings for part-time workers is similar to the general procedure.
- Those payments and allowances that are established at the enterprise in absolute amounts (fixed amounts) are not subject to adjustment.
Answers to frequently asked questions
Question No. 1: How to calculate severance payments for unused vacation days if the company has recently undergone indexation? Should it be taken into account in this case?
Answer: Yes, the calculation of payments in the event of dismissal for unused vacation days will be similar to the usual calculation of vacation pay after indexation of earnings (i.e., the average earnings conversion factor must be applied).
Question No. 2: If salaries were increased for part of the department, and not for all employees, is it necessary to recalculate vacation pay in this case?
Answer: No, since such an increase in wages will not be considered indexation, and, therefore, the rules for calculating vacation pay after indexation do not apply to these employees.
Question #3: Is it necessary to index the salaries of employees who are on maternity leave under the age of three if there is a salary increase of 10% of all employees of the enterprise?
Answer: Yes, it is necessary to conclude an additional annex to the employment contract with this employee with a new salary, in accordance with the general indexation for the enterprise. Otherwise, an increase in employee salaries will not be considered indexation with all the ensuing consequences (i.e., vacation pay will not be recalculated, payments for unused vacation upon dismissal will not be recalculated, etc.).
Question #4: Is the amount of paid vacation pay and the amount of additional payments made taking into account the indexation of wages subject to personal income tax?
Answer: Yes, according to the Tax Code of the Russian Federation, “vacation pay” and the amounts of recalculation of vacation payments are equal to wages and are subject to the same taxes (personal income tax) and contributions to compulsory health insurance funds.
Question #5: Should the amount of compensation for meals paid to the organization’s employees (a fixed amount of 1,000 rubles) be taken into account when calculating vacation pay after indexation?
Answer: No, this amount is not subject to indexation when calculating vacation pay, since this payment (compensation for food) is set in an absolute amount, it must be taken into account without changes.