How should severance pay be calculated?

16 October 20230

What is severance pay and how should it be calculated? What rights does the legislation provide us with this? In this article, we will try to provide detailed information about it.

As one of the parties to the employment contract, every employee has the right to use different types of leave (labor leave, social leave, educational and creative leave, unpaid leave) regardless of their profession, position, and the duration of the employment contract, and this cannot be limited under any circumstances. Among these types of leave, the type of leave that all of us are most interested in and look forward to, on which our entire vacation and recreation plan depends, is the work leave.

Labor leave is set every year for the corresponding working year. A working year is considered to have started from the day of the employee's employment and it is considered to have ended on the same day of the following year, and only one work leave can be granted per working year.

How is the duration of work leave regulated?

to Clause 2 of Chapter XVII, Article 114 of the Labor Code of the Republic of Azerbaijan basically, employees should be given no less than 21 calendar days of paid basic leave.

According to the Labor Code of AR, employees working in the following fields of activity have the right to use paid basic leave for 30 calendar days;

  • workers working in the production of agricultural products;
  • civil servants, managers and specialists of the enterprise serving in responsible positions (the responsibility of the position is determined by the employer taking into account the characteristics of the work);
  • with the exception of special-regime educational institutions, managers and administrative-teaching staff members who do not do pedagogical work in an educational institution, as well as heads of out-of-school children's institutions;
  • methodologists of educational institutions, head masters, industrial training masters, instructors, librarians, laboratory assistants, workshop managers, nannies, shift workers, art directors;
  • scientific workers without a scientific degree;
  • doctors, paramedics and pharmacists.

Labor leave for employees working part-time (part-time work week or part-time work day) is granted during the period of labor leave granted to full-time employees, in accordance with the duties they perform or work for.

The basic leave for seasonal workers is usually given at the end of the season for not less than two calendar days for each working month. If the holidays, which are not considered working days, coincide with the period of work leave, then those days are not counted in the calendar days of the leave and are not paid.

If the employee has worked at the workplace for at least 6 months since the conclusion of the employment contract for the first working year, then he has the right to use the paid basic labor leave.

But how is work leave calculated?

For this, first of all, it is necessary to calculate the average monthly salary paid for the leave period. The average monthly salary can be found by calculating the numerical average of the salaries of the 12 calendar months preceding the month of leave. That is, the wages of 12 calendar months should be collected and divided by the number of months. One day's salary is determined by dividing the received amount by the average annual number of calendar days of the month, that is, 30.4. Then that amount is multiplied by the number of vacation days. If the employee has worked for less than 12 months, then the vacation pay is calculated based on the actual working period.

Let's explain on such an example:

The salary you want 1600 1600 1700 1700 1800 1800 1800
History

 

September

2023

October

2023

November

2023

December

2023

January

2024

February

2024

March

2024

Total salary for 7 months = 12000

Average monthly salary = 1200/7=1714.28

One day's salary = 1714.28/30.4=56.39

Graduation fee= 56.39×21=1184.21

The average salary determined for the leave period must be paid to the employee no later than 3 days before the start of the leave.

Macis Consulting as a company, we provide a number of services to business owners who want to operate both as an individual entrepreneur and as a legal entity. Our company has been providing its business partners with both forms of business creation, accounting services, audit and legal process services for years. Contact us get all the accounting, financial and legal services your business needs.

 

ALSO READ: What are deductible and non-deductible expenses?

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We work for you
Development is inevitable
Our mission is to help entrepreneurs who want to develop their business, protect it from external influences, and ensure the success and sustainability of their future activities in the areas we are professionals.
Our offices
Where are we?
https://www.macisconsulting.az/wp-content/uploads/2020/04/img-footer-map.png
Baku
Just a click away
We on social media
You can get useful information for your business by following our social media accounts.

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