The final settlement with the employee upon his dismissal implies the payment of funds that are due to the latter for the entire time of his labor activity. In this case, it is necessary to take into account the grounds for terminating the contract. After all, the citizen’s salary and other necessary payments will depend on this basis. In such a situation, the manager should not forget that the full settlement with the resigning person should be made on the day when the employee last performed his activities in this organization. Otherwise, the boss simply cannot avoid problems with the law.
Grounds
The final settlement upon dismissal is made in all cases of termination of the employment contract. But only on the grounds on which the relationship between the employee and his boss ceases will depend on the amount of money that the person will receive in the end. According to the norms of article 140 of the Labor Code, the head must pay all the funds due to the citizen on the last day of his work. And if it is impossible to carry out this procedure at the indicated time, you need to do it the next day, when the employee has submitted a demand for settlement with him. Otherwise, management may be in big trouble if a person seeks protection of violated rights in court.
An employment contract can be terminated both at the request of the employer, and at the initiative of the citizen himself, as well as for reasons beyond their control. In addition, the desire to terminate the labor agreement is often mutual. In the latter case, the final settlement under the contract can be made not only on the final day of the person’s work, but also after this moment.
Types of payments
Regardless of the reasons for termination of the employment contract, a final settlement is required. Mandatory payments include:
- employee salary;
- compensation for vacations that have not been used;
- severance pay upon termination of the relationship between the parties to the contract under paragraph 2 of Part 1 of Art. 81 of the Labor Code of the Russian Federation.
Additional types of monetary support include: the allowance for dismissal by agreement of the two parties, as well as other types of material compensation established by the collective agreement.
Issuance and Retention Procedure
It is clear that all due money should be paid to the employee. At the same time, some of them can sometimes be held. In a specific case, we are talking about vacation pay for dismissing an employee for the vacation that he used, but the period of work was not fully worked out, and the citizen decided to end his relationship with this organization and wrote a letter of resignation.
But there is one more important nuance. Money for the used vacation will not be deducted by the employer from the person’s salary upon his dismissal only if his departure from work will be carried out in connection with the reduction of staff or liquidation of the organization. In this case, the employee will also have the right to severance pay in the amount of the average income for two months, and if he did not get a job, then for the third month. The final settlement upon the dismissal of a citizen occurs on the last day of his labor activity. And he is paid: salary, compensation for unspent vacation, severance pay, if applicable.
Vacation calculation
The company, from which the employee leaves, must pay him compensation for vacation that has not been used for the entire period of labor activity. In the event that a person has not been in it for several years, accordingly, the amount of payments is made for all this time. If a citizen terminates his employment relationship with the organization on his own initiative, and the period of work he has not completely finished, then in this case deductions are made from his salary for the used vacation. In this case, the accounting department will have to calculate the exact number of days or months the person’s work.
The amount of vacation pay upon dismissal is calculated as follows:
- The number of days of annual paid leave is taken, for example 28. Then it is divided by the number of months in the year, that is, by 12. Then the resulting number (2.33) is multiplied by the number of months worked, for example 4.
- If you multiply 2.33 by 4, you get 9.32 unused vacation days. Then this number is multiplied by daily earnings, for example 900 rubles. It turns out 8388 rubles. This is the money that is put to a person as compensation for unused vacation. Personal income tax will be withheld from the same amount - 13%.
The final settlement with the employee should not be delayed by the boss. It must be done on time, regardless of which of the grounds specified in the Labor Code, a citizen quits.
Rules for calculating the termination of an employment contract
All payments due to the employee, the latter must receive on the final day of his employment at the enterprise. In the event that the head did not make the final settlement at the indicated time, he will bear administrative responsibility. In this case, the citizen should receive not only compensatory payments, but also the salary itself during the work.
For each day of delay in payments, the head pays a fine in the amount of 1/300 of the refinancing rate of the Central Bank of the Russian Federation. In addition, if the amount of the final calculation when paying the severance pay is more than the amount of three times the employee’s earnings, then personal income tax in the amount of 13% should be paid from this monetary allowance. The tax is also withheld upon payment of vacation pay.
Self-care
The final settlement upon dismissal of his own free will must be made with the person on the last day of the exercise of his labor duties, which includes:
- salary for the entire time of work;
- compensation for vacation or vacation if the person worked without annual rest for several years in a row.
An important fact should be noted here. If the vacation was used by a citizen, but the period of work was not completely completed, accordingly, upon termination of the contract at the request of the latter, the employer has the right to withhold funds previously paid from his money.
When it is not possible to hold deductions for unearned vacation
In a number of cases stipulated by law, deduction for leave upon dismissal is not carried out. The following situations fall into this category:
- Liquidation of the organization of the employer.
- Staff reduction.
- Termination of an employment contract when a citizen cannot fulfill his duties due to illness.
- Conscription in the army.
- With a complete loss of previous working ability.
- Reinstatement by court decision.
- Termination of the employment contract upon the occurrence of circumstances that are independent of the parties.
In any of the above cases of the dismissal of a person, the boss must make a final settlement with him on the last day of his labor activity and pay all the money that is legally required. Otherwise, the person has the full right to defend his interests in the prosecutor's office and the judiciary.
Severance pay: its calculation and size
In the situation when the employer is the initiator of the termination of labor relations, a citizen has the right in some cases to receive compensatory benefits. It is also called a weekend. In this case, the size of this payment may be in the amount of two weeks or a month earnings. Cash allowance in the amount of an employee’s salary for two weeks may be in the following cases:
- If the state of human health does not allow him to continue working in this organization. Or when he refuses to transfer to another position, and the boss has nothing more to offer him.
- With a complete loss of a citizen’s working ability.
- If the terms of the employment contract change.
- When a person is called up for military or alternative service.
In the amount of monthly earnings, the benefit is paid:
- upon termination of the employment contract due to reduction;
- in case of liquidation of the organization.
A collective agreement may also establish other circumstances when such an allowance is issued to an employee. Nevertheless, the payment of the final settlement upon dismissal, including compensatory benefits, must be made on the last day of the person's labor activity. In addition, when calculating this type of compensation, it is necessary to take into account the payment of taxes if the amount of cash allowance will exceed the employee's salary three times. Otherwise, personal income tax is not paid.
Final settlement example
An employee who completes his labor relationship with a particular organization has the right to receive earned money and other compensations, if the grounds for dismissal allow this to be done. Consider the following example.
Worker Ivanov leaves the company of his own free will. Naturally, in this case he does not receive severance pay and the preservation of average earnings for the third month before the time of employment. But he has the right to pay earned money for the whole time and compensation for the vacation. The final calculation of the employee in this situation will be made according to form T-61. This is a calculation note to be completed upon termination of employment.
Ivanov wrote a statement in April and resigned on the 19th. Accordingly, he should be counted and given remuneration for labor from 1 to 18 inclusive. If his average salary is 20,000 / 22 working days (such a number of them in April), the sum of the day is 909.09 rubles. It is multiplied by the number of days worked in the month of dismissal - 18. As a result, the sum is 16363.22 - Ivanov’s salary for April. In addition, the organization first pays tax on this money, and then accountants issue the final settlement to the citizen.
Since the person leaves in April, and the vacation on schedule he only has in June, and he did not use it, he is compensated. The calculation takes place in the following order:
Ivanov worked 3 months and 18 days this year. But the calculation will go for 4 full. Rounding to the tenth and hundredth part is not done, so the amount is calculated from 28 days of vacation / 12 months in a year = 2.33 days. After which 2.33 * 4 (worked months) = 9.32 days. And only then 9.32 * 909.9 (daily earnings) = 8480.26 (compensation for vacation).
Thus, the final calculation is made from all amounts due to the employee. But in this case, it is only a salary and a cash payment for the vacation, because Ivanov is leaving on his own initiative. If he had been reduced or dismissed in connection with the liquidation, he would have also received severance pay, which is also paid with all money (based on article 140 of the Labor Code of the Russian Federation).
Arbitrage practice
Currently, many former employees are going to court to protect their rights, which they believe have been violated by the supervisor upon dismissal. Especially if the issue relates to cash payments that were not timely and in the right amount were handed over to the employee. In practice, there are even such cases when employers, when settling with a citizen while downsizing, made deductions from their income for vacation that had previously been used. And this ultimately led to litigation and complaints.
Here is a colorful case study. The employee was fired from the staff reduction organization. The boss paid it off completely, but when paying the money, he withheld for the vacation, which was already used by the citizen in June. In addition, the dismissal procedure for the reduction was violated by the employer in the sense that he did not offer the available vacancies to the employee. But at the same time, he was taking other persons to vacant positions, which is forbidden to do when carrying out dismissal measures on such grounds. Having counted his earned money and discovered violations of labor laws, the former employee appealed to the judicial authority with a request to be reinstated at work and to pay for forced absenteeism, which occurred due to the fault of his boss.
Having examined all the materials of the case, the court concluded: the employer carried out the reduction procedure without observing the norms of the labor code. In addition, he made a completely wrong calculation with the employee. He simply did not succeed in final settlement upon dismissal (2016). He grossly violated the norms of the labor code, in connection with which the citizen was reinstated at work in his post, and the employer paid him moral damage and compensation for the used vacation, which he had previously illegally withheld. That is why, when calculating with employees, managers need to be especially careful and not commit violations on their part, so as not to prove their case in court later.