Cheat sheet for an accountant: severance pay in 2021

In some cases, employees may require employers to pay them severance pay upon dismissal, in addition to the salary itself and unused vacation.

Thus, the Labor Code of the Russian Federation states that:

Every citizen of our country has the right to both work and appropriate payment.
Also, everyone has the right to receive benefits due to dismissal from a previous job.

This applies to layoffs due to staff reduction or liquidation of the enterprise. However, if the departure was made at one’s own request, as well as by agreement of the parties, compensation is due only in special cases.

This payment is issued so that while the employee is looking for a new job, he does not have to live in poverty and has the means to live.

Most often, it is paid in full only for the first month following dismissal. Also, payments may already be in reduced form for the next few months, but only if there are grounds for such.

Who pays severance pay upon dismissal?

An employer - a legal entity is obliged to guarantee the payment of severance pay to dismissed employees, except for the grounds for dismissal listed in the law.

Question: How to include a provision for severance pay upon dismissal in an employment contract, including by agreement of the parties? View answer

If the employer is a private entrepreneur , then the issue of payment of severance pay remains at his discretion. These points are discussed during hiring and must be reflected in the employment contract. If the main document, which is intended to regulate the concluded labor relations, does not address this issue, the dismissed person may be left without severance pay, and this will be legal.

Question: Is severance pay subject to personal income tax upon dismissal in connection with the liquidation of an organization, reduction in the number or staff of employees in the amount established by Art. 178 of the Labor Code of the Russian Federation (clause 3 of Article 217 of the Tax Code of the Russian Federation)? View answer

Dismissals with benefits

When a dismissal order is issued, it indicates the basis for releasing the employee from his position and the corresponding article of the Labor Code. Each reason has its own procedure for terminating employment agreements, which in many cases includes the accrual of “severance” benefits. It is based on the following grounds:

liquidation of an enterprise, organization, firm;
reduction in staff or numbers;
professional unsuitability for medical reasons (if there is no other suitable vacancy or the employee’s desire to take it);
complete loss of ability to work (according to a medical report);
reluctance to continue working in changed working conditions;
disagreement with transfer to another location following the employer;
conscription into the army or substitute service;
leaving maternity position;
cancellation of an incorrectly drawn up employment contract;
vacating a position for an employee who previously occupied it, who was wrongfully dismissed and reinstated by a court decision or labor inspectorate.

NOTE! Severance pay is available to almost any employee forced to leave their position, as long as they are in compliance with the law and the provisions of the employment contract.

Calculation procedure

After a person has decided to stop working at an enterprise, and wants to do this of his own free will, his employer must understand that in this case certain obligations arise.

The first thing the employee and his employer need to pay attention to is the calculation that must be made. This includes the following amounts:

payments for all days of unused vacation;
payment for days worked, as well as other amounts that were accrued but for some reason not paid to the employee.

The second question that will be raised is the timing of calculation in the event of dismissal of an employee at his own request. In 2021, labor law standards have not actually changed. According to them, the full calculation, in the event of voluntary dismissal, should occur as follows:

if the employee was at work, then on the last day he is given a work book, and a calculation is also made that is due after dismissal at his own request;
if a person was not at work on the last day (sick leave, vacation), then payment will be made to him only after he appears at the enterprise, that is, after a certain period of time.

It should be remembered that the procedure for settlement with an employee who has written a statement that he wants to resign of his own free will is clearly regulated by current legislation. If the deadline is violated, then various financial sanctions may be imposed on the individual entrepreneur, who acts as an employer, after the person applies to the labor protection inspectorate, the prosecutor's office or the court.

It is important to know that the procedure for voluntary dismissal is a separate article on termination of employment, and in this case, both parties have clear rights and responsibilities that must be used.

Specialist about the procedure: video

Managers also quit

And, accordingly, they have the right to an honestly deserved severance pay, but only on the condition that there are no illegal actions on their account or they did not make decisions that negatively affected the finances of the enterprise. In what cases are labor benefits accrued to top managers:

if they are removed from office by the decision of the founders without any guilt (clause 2 of Article 278 of the Labor Code of the Russian Federation);
the boss, his deputy, the chief accountant, whom the new owner of the business decided to fire.

FOR YOUR INFORMATION! If, by a court decision, a person (whether a manager or an ordinary employee) has been prohibited from engaging in certain types of activities, then, upon leaving this position, he also has the right to a “severance” payment.

Calculation of payments for unused vacation

In 2021, the procedure for making compensation payments to those who resign of their own free will has not changed at all compared to 2021.

Example of vacation pay calculation:

if the length of vacation is 28 days, then for each full month worked the worker can count on 2 calendar days of vacation;
6 months have been worked, from the last vacation, after which a letter of resignation is written, which means compensation will be for 12 days of unused vacation.

This example is universal and can be applied to the calculation of any vacation pay. A sample calculation can be found in the Government Decree on the procedure for calculating the average daily wage and payment for vacation.

There are cases when the vacation period is reduced to 26 days. Then one month will not produce an integer (for example, it will be 1.8 days). In this case, everything is rounded to a whole number - 2, and the calculation takes two days.

This needs to be remembered. Because in case of incorrect payment of vacation pay, a person can file a complaint with various government bodies, which can fine an individual entrepreneur or other business entity.

It is important to know that the above Government Resolution, as well as the Labor Code, prescribe penalties for late payment to a worker. He may demand compensation for late payment, as well as a penalty, which will be equal to the key rate, which is determined by the Central Bank of our country.

It changes constantly throughout the year and needs to be monitored.

Who will be left without benefits?

There are several reasons why those being laid off are not legally required to pay severance pay. In most cases, they imply the own will or the guilty actions of the dismissed employee. The exception is short-term contracts.

These grounds do not imply corresponding payments:

care according to one’s own desire (clause 3. part 1 of article 77 of the Labor Code);
the employee failed to complete the probationary period (Part 1 of Article 71 of the Labor Code);
agreement of the parties;
initiative of the employer, if the misconduct of the dismissed person provides for an extreme measure of administrative liability (Article 81 of the Labor Code);
inconsistency with the position held by the employee;
when a contract concluded for 2 months or less comes to an end.

What amounts can you expect?

The amount of accrued severance pay is calculated in accordance with the following factors:

Average monthly earnings.
The number of days in the compensated period, excluding weekends and holidays.
Territorial location of the enterprise.

ATTENTION! Since the essence of this payment is support in the first two months of new employment, only working days are taken into account. The more weekends and holidays there are in the compensated month, the less the benefit will be.

Payment can be made for a period of 2 weeks, a month or 90 days after dismissal.

Salary for 14 days is due to the following categories of dismissed:

upon dismissal due to medical reports;
conscripted into the armed forces;
if you refuse to move to a new location if the organization moves there;
when a former employee is reinstated;
if you are unwilling to work in changed conditions;
“conscripts” during which the enterprise is liquidated or its staff is reduced.

Earnings for 1 month are based on:

upon cancellation of employment contracts executed with certain violations;
upon complete dismissal due to the cessation of the organization's existence.

3 monthly salaries will be received by:

managers, their deputies and chief accountants who leave their positions by decision of business owners.

IMPORTANT! The employee will be paid the amount of average earnings for another 2 months after hour X, if during this time he fails to find a new job. In some situations, the Employment Service decides to extend the payment for another 1 month (if the dismissed person applied to this body within 14 days and did not find a job after 2 months).

Some regions of Russia are in special conditions, for example, the Far North and areas equivalent to this region. If the enterprise from which the employee leaves is located in a similar zone, then all payments are calculated differently, for example, the period for maintaining wages during the job search period can be increased to six months (Article 318 of the Labor Code of the Russian Federation).

To calculate labor benefits, it is enough to calculate the average daily salary and multiply it by the number of days subject to compensation.

The legislative framework

The Labor Code of the Russian Federation has prescribed at the legislative level the legality of such payments. And if the employer notifies you of a layoff, then referring to Article 178 of the Labor Code, namely:

Clause 1, Article 81 of the Labor Code of the Russian Federation - the enterprise is being liquidated;
Clause 1 of Article 81 of the Labor Code of the Russian Federation - the number of employees is being reduced, you are applying for additional benefits.

It turns out that the employer pays you for the next month after dismissal, because you lost your earnings on his initiative.

It was not possible to find a suitable position within 2 months; you have the right to receive another payment at the end of the second month of non-employment.

Examples of calculating labor benefits

The LLC where S.M. Galuzinsky worked is being liquidated. The employee earned 8,000 rubles. per month. We calculate the average earnings per day: the number of working days for the year was 220, multiply the salary by 12 months and divide by the number of days worked: 8000X12/220 = 436.36 rubles. The basis for dismissal involves the accrual of S.M. Galuzinsky. amounts equal to one average monthly salary. Next month there will be 20 working days (no holidays). Thus, Galuzinsky S.m receives 436.36X = 8727 rubles.
Salary of Denisova V.A. – 10,000 rub. per month On January 11, 2016, she was fired due to staff reduction. For the previous accounting year, she had 249 working days, she earned 12x10,000 = 120,000 rubles, which means an average of 120,000/249 = 481.9 rubles per day. Next month (from January 12 to February 12, 2021) there will be 23 paid days. January 11 Denisova V.A. received severance pay in the amount of 23X481.9 = 11083 rubles. A week later, she contacted the Employment Center, but she was unable to get a job by February 12, and benefits were awarded to her again. From February 12 to March 12, 21 days without days off, minus March 8, so she is entitled to 20x481.9 = 9638 rubles for this period. If she had not involved the Employment Service or registered after January 24, this payment would have been her last. In the work book of Denisova V.A. There was no record of a new place of work for the next month either. Since she contacted the Employment Service on time, she is entitled to one more, final financial assistance. In the third billing month (from March 12 to May 12, 2016) there are 19 working days (except Saturdays and Sundays, May holidays are also excluded). Denisova V.A. will receive 19X481.9 = 9156 rubles. She is not entitled to any more payments.

IMPORTANT INFORMATION! The Labor Code of the Russian Federation provides a minimum of guaranteed financial support for those who have lost their jobs. The amount of the benefit may be revised upward if such a possibility is noted in the collective agreement or local regulations of a particular enterprise.

Calculation

The amount the employee receives as compensation depends on the circumstances of the dismissal.

The amount of benefits paid by the employer directly depends on several factors, starting with the size of the average salary, as well as the total number of workdays in the month following dismissal. Therefore, the fewer there are, the correspondingly smaller the size of the payment will be.

You may be interested in an article about payments to Chernobyl victims.

Read the article on the amount and procedure for paying benefits to large families here.

All responsibilities for payments, as well as calculations, fall on the shoulders of the employer. Exceptions in this case can only be made by individual entrepreneurs who hired an employee under an employment contract, if it did not provide for such payments.

The law states that the amount of benefits received must be no less than the average monthly earnings. It will be retained by the dismissed employee for three months if he is not officially employed.

Please note: if the termination of the employment contract was made on the initiative of the employee himself or due to circumstances that arose not because of the employer, then the amount of funds issued will be halved.

It is very easy to calculate the amount yourself. To do this, you need to multiply the total number of workdays in the coming month by the official average daily earnings for the previous year. To calculate the latter, you need to add up all salaries received, not counting allowances and bonuses, and then divide by the total number of working days over the past year.

What about tax payments?

This payment, received on the last working day, constitutes the income of an individual, but such income, as Art. 217 of the Tax Code of the Russian Federation, is not subject to income tax if the amount is accrued in the amount established by law. Insurance and pension contributions for the amount of benefits specified in the Labor Code are also not made.

If an enterprise, by its own will, enshrined in the relevant documentation, increases the minimum payable prescribed by law, then the excess is subject to taxation. Insurance premiums and personal income tax will have to be paid on the amount that exceeds the usual payments.