Deduction for unworked vacation days upon dismissal: accounting entry, calculation of vacation pay

The relationship between employee and employer is a rather complex process. That is why it is regulated by legal acts, as well as, of course, the country’s Labor Code. Many disputes and questions arise when an employee is fired. Especially if the employer plans to make any deductions. These include deduction for unworked vacation days upon dismissal. There are some nuances here that both the employer’s representative and the employee need to know. The first one needs to protect his interests, but not violate the current legislation, and the second one just needs to make sure that his rights have not been violated. Both parties should not lose money. Therefore, the article presents the most frequently asked questions and reveals typical situations.

Types of vacations. Administrative and student

First of all, it is necessary to decide what kind of vacation the employee is entitled to. There are several of them, depending on what job the employee is doing or the purpose of use.

The latter include administrative and student leave. The first represents days for which the employee does not receive payment. But at the same time, he is not given absenteeism on his report card, since his failure to appear was agreed upon with the employer, and this fact was confirmed by an order. Administrative leave is usually issued in unforeseen situations, for example, if it is necessary to go to see relatives or some kind of misfortune has occurred. Since administrative leave is unpaid, no one can keep it.

Student leave is granted to an employee who is receiving first higher or secondary education in parallel with work. According to the law, the employer is obliged to provide days of student leave upon presentation of a summons certificate issued by the educational institution. Moreover, each course has its own number of days for the session and final certification, which can be paid for. That is, in the first and second years it is forty calendar days, and in the third and subsequent years it is fifty. It is worth noting that this refers specifically to calendar days of vacation. Extension of student leave on holidays is not practiced.

If an employee receives a second higher education, he is not entitled to paid student leave. It is not possible to receive such leave in advance, since payment is made after the end of the month, that is, vacation pay is not issued before the due date, as happens with the next vacation. Accordingly, deductions for unworked vacation days upon dismissal of tangential student leave cannot be made.

Another vacation. What the law says

Every employee has the right to receive paid leave, also called annual leave. The Labor Code explains which categories of workers can count on vacation leave. These include:

• Employees for whom this place of work is considered their main place of work.
• Part-timers.
• Working from home or remotely.
• Employees performing part-time duties.

This list includes almost everyone who takes part in labor activities at the enterprise. Thus, every employee has the right to leave within a specified period and for a certain number of days.

What is the duration of the annual basic paid leave at the enterprise? The standard vacation for most organizations is twenty-eight calendar days. More specifically, Article 115 of the Labor Code emphasizes that an employee cannot receive less than twenty-eight calendar days of annual leave per year. However, there are other categories of persons who have the right to a longer period of rest, due to the complexity of the work, as well as workers who receive additional leave, for example, due to harmfulness, or disabled people of the second group.

Additional holidays. Prepaid expense

Additional leaves may be granted to a number of employees. These include those who work in the Far North, are disabled in the second group, or work in hazardous working conditions.

In all these cases, the law provides for additional days of rest, which are paid by the employer. An interesting fact is that each of them, with the exception of additional sick leave, can be taken by the employee in advance, that is, for time not yet worked. Thus, these types of leaves are also subject to withholding.

But in the case of leave, which is provided to those employed in enterprises with hazardous working conditions, additional days are provided strictly for the time worked. Therefore, there is no such thing as “taking a vacation in advance” for this type. That is, there is no way to keep them.

For what period can vacation be given?

Why does the situation arise that it is necessary to make a deduction for unworked vacation days upon dismissal? It would seem that everyone has the right to a certain number of days of rest per year, and there should be no excess. In practice, everything looks different.

The Labor Code, to which the employer refers, states that an employee can receive his first vacation after working at the enterprise for at least six months. In this case, annual leave can be issued for fourteen calendar days, that is, exactly half of the allotment.

All other years, the employee can take the prescribed days of rest in any month, coordinating this with the work schedule and vacation schedule. It would seem that an employee who started in November and worked for several years should take vacation after working for a year, that is, not earlier than November of the next year. However, in practice he can take it at any time, for example in the summer. If the vacation was taken in June, then the employee “didn’t work” for several more months: July, August, September and October. That is, during these months he was not yet entitled to vacation; this is precisely the situation that is called “vacation in advance.”

An example of calculating and reflecting the vacation reserve in the accounting accounts

Vacation pay relates to expenses for ordinary activities (clauses 5, 8 of PBU 10/99) and are recognized in accounting in the period in which they were accrued, regardless of when they were paid (clauses 16, 18 PBU 10/99).

We suggest you read: Maternity leave for the father if the mother does not work

In the case of “rolling over” vacations from one month to another, the accrued amount of vacation pay for the month that has not yet occurred is recognized in accounting in the reporting period in which employees become entitled to vacation. For example, vacation began in June and ended in July - the entire amount of vacation pay is recognized as an expense in June.

Debit 20 (23, 25, 26, 29, 44) Credit 70

https://www.youtube.com/watch?v=ytadvertise

Debit 20 (23, 25, 26, 29, 44) Credit 96 – reserve for vacation pay has been accrued.

Debit 96 Credit 70 – vacation pay was accrued from the reserve for vacation pay.

We recommend the webinar “Creating a reserve for vacation pay”

The calculation and reflection of the vacation reserve in accounting must be carried out at each reporting date. According to current legal requirements, the balance sheet is compiled once a year - that is, December 31 will be the reporting date.

For information about when to submit financial statements, read our material “When to submit a balance sheet - deadlines, nuances.”

However, it is more accurate and correct (primarily for management accounting) to form vacation reserves on a monthly basis, since this type of reserve depends on the number of employees and vacations taken - and these values ​​can change very often. It should be understood that monthly reserve calculation is labor-intensive. The organization needs to independently determine the desired frequency of settlements and record it in its accounting policies.

In accounting, account 96 is intended to reflect such information. All planned costs of the company are accumulated on it, including vacation pay. In this case, a separate sub-account is opened for each type of expense.

As you can see, the reserve is always accrued to the same accounts as employee salaries. Insurance premiums are calculated according to the same principle, but in correspondence with the reserve account, and not with accounts for settlements with extra-budgetary funds.

The balance of account 96 when generating periodic reporting is reflected in the liability side of the balance sheet. Line 1540 “Estimated Liabilities” is intended for this purpose.

Please note: if reserves in an organization are created only in accounting, then the base for calculating income tax is not reduced, and temporary tax differences arise, in accordance with PBU 18/02. If the accounting policy for tax accounting states that this reserve is taken into account when calculating income tax, the right appears to create it in the manner specified in Art. 324.1 Tax Code of the Russian Federation.

IMPORTANT! Creating a reserve for tax purposes is a voluntary matter, depending only on the decision of the business entity.

You can read more about the information required to be reflected in the accounting policies in our article “Accounting Regulations and Accounting Policies of the Organization.”

You can read about the provisions of tax policy in the material “How to draw up an organization’s tax policy?”

https://www.youtube.com/watch?v=ytabout

This is an example of the above method of calculating the reserve - based on average earnings. Below you will see examples for other reservation options.

Example

reflected in the accounting policy that the reserve for vacation pay is formed quarterly. To calculate wages and insurance premiums, account 44 “Distribution costs” is used; in total, the company employs 20 people. The company has no grounds for applying reduced or increased insurance premiums (the total rate of insurance premiums is 30.2%). As of March 31, 2019, the data for the quarter is as follows:

• number of days of unused vacation - 134;
• for the 1st quarter, the amount of accrued wages amounted to 678,000 rubles;
• there are 91 days in the quarter.

1. Let's calculate the reserve as of March 31, 2019:

SDZ = 678,000 / 91 / 20 = 372.53 rubles.

The reserve amount is 372.53 × 134 × 20,372.53 × 134 × 20 × 30.2% = 998,380.40 301,510.88 = RUB 1,299,891.28.

Dt 44 “Sales expenses” Kt 96.01 “Vacation reserve” - RUB 998,380.40.

Dt 69 “Extrabudgetary funds” Kt 96.01 “Vacation reserve” - RUB 301,510.88.

1. Let’s add a few more data to this example to understand how the vacation reserve is adjusted:

• as of March 31, 2019, a reserve for vacation and insurance premiums was accrued in the amount of RUB 1,299,891.28;
• in the 2nd quarter, the amount of accrued vacation pay and insurance contributions from them amounted to 140,900 rubles;
• the number of unused vacation days at the end of the 2nd quarter is 120 days;
• wages for the 2nd quarter and the number of employees remained the same as in the previous period.

Thus, as of June 30, 2019, the amount of the unused reserve amount is equal to 1,299,891.28 – 140,900 = 1,158,991.28 rubles.

SDZ = 678,000 /91 / 20 = 372.53 rubles.

The reserve amount is 372.53 × 120 × 20,372.53 × 120 × 20 × 30.2% = 894,072,270,009.74 = RUB 1,164,081.74.

1,164,081.74 (calculated reserve) – 1,158,991.28 (reserve balance, balance on account 96) = 5,090.46 rubles.

If the amount of the reserve on the account. 96 exceeded the calculated amount at the end of the quarter, the reserve should have been reduced. In our case, it is necessary to make an additional accrual posting.

https://www.youtube.com/watch?v=upload

Dt 44, 69 Kt 96.01 - 5,090.46 rub.

We invite you to read: Lease agreement between a legal entity and an individual

Calculation of vacation days. Frame work

In most companies, an employee can take leave at his personal request.

How are days calculated? If during a calendar year an employee has the right to twenty-eight days of vacation, this means that he is entitled to 2.33 days every month. So, if an employee who got a job in November wants to take a vacation in June, he can take it for 16 or 17 days. In this case, if an employee decides to resign, he will not owe the company anything. Accordingly, no deduction will be made for unworked vacation days. In this case, for the calculation, both the full month and the one that was worked by the employee for more than half are taken.

How to withhold overpaid vacation pay upon dismissal (example)

The employee was registered on the staff on 02/04/2014. In November I took 28 days off. I submitted my resignation on September 30, 2014. The average daily earnings when calculating vacation pay is 1,750 rubles. The working year corresponds to the period from 02/04/2014 to 02/04/2015; the period from 10/01/2014 to 02/04/2015 remained unworked, which is a full 4 months (4 days of February are not taken into account, since they do not reach half a month). The experience is 8 months. Following the formula, we calculate the vacation days not worked: 28 – (28/12*8) = 9.33 days Next, we calculate the vacation pay paid in advance, subject to withholding: 9.33 * 1750 = 16327.5 rubles.

We recommend reading: Appealing a will, judicial practice

In this case, it is assumed that after the end of the vacation the employee will return to the workplace and work the allotted time. However, this does not always happen in practice. Sometimes an employee, having rested in advance, soon quits without working the required period for the granted leave. In this case, the employer has the right to withhold the amount of vacation pay overpaid to the employee. However, there are certain restrictions that employers need to be aware of.

How many days can I take a vacation?

As for the rights of the employee, it is worth recalling Article 122 of the Labor Code. It says here that a citizen has the right to take his leave for any time by notifying the employer two weeks in advance. This is also prescribed in advance in the vacation schedule for the next year. So the employee has the right to receive full leave at any convenient time.

As for dividing the allotted days, the Labor Code gives a hint here too. It says that you can take vacation in parts. However, it is worth noting that one part must be at least 14 calendar days. But the size of subsequent ones is not regulated. However, not every employer is ready to issue vacations of two or three days. Therefore, the employee should negotiate with the employer or personnel department employees.

Deductions from employees' wages

• according to the writ of execution. For example, payment of alimony;
• repayment of debt to the organization (by decision of the employer with written notification to the employee);
• repayment of unspent and not returned accountable amounts in a timely manner, or in the event of failure to provide documents confirming expenses;
• in case of early termination of the employment contract, the employee reimburses the employer’s costs associated with training the employee in proportion to the unfinished period (according to the training contract);
• reimbursement of an unpaid advance payment issued to an employee on account of wages;
• in other cases, with the written consent of the employee.
  We recommend reading: Young family certificate 2019

  If an employee damages the property of the enterprise, the employer has the right to withhold the amount of damage from wages, having previously notified the employee in writing about this. In this case, the amount of the recovery amount cannot be increased unilaterally by the employer.

Approximate vacation registration scheme

In most organizations, taking leave is a simple matter. If the employee is following the schedule that was drawn up in the previous year, then no personal statements are required. Two weeks in advance, HR department employees draw up an order, which is signed by the head of the enterprise or structural unit, as well as the employee himself. You should be careful, since the order specifies the dates of vacation, as well as the number of days of rest. By signing the document, the employee gives his consent to these dates and a specific number of days.

If the vacation needs to be postponed or days taken from the past, then you should write an application, which is reviewed by the employer. After the signature of the management persons, an order is also issued. Based on the order, a calculation note is drawn up, which is sent to the accounting department.

If an employee decides to quit

However, controversial issues begin to arise if an employee who took leave for an unworked period decides to quit. It’s worth noting right away that the employer cannot keep him at the enterprise. HR department employees should also not refuse to hand over a work book, as this would be illegal.

There are two ways of peaceful settlement. In the first case, the employer simply withholds the amount that was written out for unworked time. This situation is possible when dismissal occurs at the end of the month in which all days were worked. In this case, there will be enough funds to repay the entire amount. The second option is also to pay off the debt, but in cash to the company’s cash desk.

It is worth noting that some people mistakenly believe that an employer cannot withhold more than twenty percent of accrued wages. In this case, they refer to Article 138 of the Labor Code. But it should be understood that here we are talking specifically about salary. Withholding for the unworked period is regulated by Article 137. Therefore, the employer can withhold the entire amount of wages after calculating the tax.

It is worth noting that the calculation of vacation days can only be rounded towards the employee. That is, the employer cannot make a deduction for three days instead of 2.33. And in two whole days - maybe. This is enshrined in the Labor Code.

Can an employer sue?

A situation may arise when the calculation of unworked vacation days has been made, but the amount of earnings is not enough to repay the entire debt. If the employee refuses to pay the amount in cash, the employer bears losses.

In this case, there are two opinions that differ from each other. In the first option, they refer to Law No. 169, which expresses theses about regular and additional leaves. According to this legal document, the employer does not have the right to recover from the employee after his dismissal.

But many experts agree that this document contradicts a number of articles of the Labor Code. Therefore, any employer has the right to sue an employee.

Tax nuances of vacation advance forgiveness

The debt forgiveness agreement signed by the parties automatically triggers the tax adjustments associated with this event.

For the employee, recalculation of tax obligations does not lead to material losses - the tax on his income in the form of a forgiven debt has already been withheld when he was paid vacation pay. Changing the status of the amount received from vacation pay to a bonus from the employer (debt forgiveness) does not have an impact on personal income tax obligations.

What to do with personal income tax if an employee voluntarily repays the debt on advance vacation pay, see the material “Personal income tax on unearned vacation pay is subject to return.”

The employer's situation is different. In connection with the “act of goodwill” in relation to the employee, the income tax will have to be recalculated. In this case, it becomes necessary to exclude from expenses the amount of unearned vacation pay (clause 1 of Article 252, clause 49 of Article 270 of the Tax Code of the Russian Federation). Tax officials consider such expenses to be economically unjustified (letter from the Federal Tax Service for the city of Moscow dated June 30, 2008 No. 20-12/061148).

With regard to the amount of unearned vacation insurance premiums accrued, it should be noted that there are no grounds for their recalculation - they were accrued within the framework of the labor relationship. The legality of their inclusion in tax expenses is not disputed by officials of the Ministry of Finance (letter dated April 23, 2010 No. 03-03-05/85).

Exceptions to the rules. When you can't hold on

In what cases can deductions for unworked vacation days upon dismissal not be made? The Labor Code identifies the following situations:

• Reduction of the organization's staff.
• Liquidation of the enterprise.
• Refusal of an employee to be transferred to another job.
• Death of an employee.

All these situations are united by the fact that the employee cannot predict them, that is, the overuse of vacation days did not occur through his fault or initiative. In this case, the employer bears losses. An employee cannot be held responsible for the employer’s mistakes; this is enshrined in law.

Accounting activities. Calculation

The calculation of unworked vacation days upon dismissal is carried out by personnel department employees. However, their work does not end there. They must issue a dismissal order, and on its basis draw up a settlement note.

However, accounting comes into play next. Deductions for unworked vacation days upon dismissal are made by accounting employees.

After receiving the dismissal order, which specifies the days that the employee took time off for unworked time, the accounting department begins calculations. To do this, you need to take the billing period that was used to calculate vacation pay. That is, if an employee took a vacation in June and quits in September, twelve months from June to May are taken for calculation, and not from September to August. This is fair, since the same amount that was overpaid is withheld.

Vacation pay is calculated using a formula that includes the following indicators:

• The average number of days is 29.3.
• Number of days required to hold.
• The number of days worked in a specific pay period.
• The amount of earnings that is included in the calculation of the average.

If all months have been worked in full, then the total number of days worked is calculated by multiplying 12 months by 29.3. Accordingly, if an employee got a job earlier than 12 months before dismissal, it is multiplied by the number of months worked.

An example of calculating and reflecting the vacation reserve in the accounting accounts

Since the formula used to calculate the amount of the reserve is not defined by law, each company determines it independently. In this case, the developed method should be fixed in the accounting policy.

IMPORTANT! Any estimated liability should be as close as possible to a reliable monetary estimate of future expenses. The reserve should be determined on the basis of existing facts of the organization's economic activity, and the calculation should be based on accumulated work experience and, possibly, some expert opinions. That is, calculations must be supported by documents and be extremely justified.

Thus, to justify the amount of the accrued reserve for vacation pay, the organization must have:

1. A method for calculating a reserve established in the accounting policy that would provide a reliable estimate of expenses for this item.
2. Developed primary document to reflect the calculated reserve (certificate, for example). It is worth attaching a primary document, the information on which was used in the calculation (time sheet, pay slip, etc.).

There are several ways to calculate the reserve for vacation pay. First, let's look at one of them, which is fairly accurate - it is based on the actual number of unused vacation days and the average daily earnings of employees:

1. First, you should break down all employees by department to determine which cost accounts are used (20–26, 44, etc.).
2. It is necessary to have information on the number of vacation days entitled to each employee. If you have automated accounting, collecting this information is not difficult. These days should be summed up for each employee group.
3. We calculate the average daily earnings (ADE) of workers for each group. To do this, you must first divide all employee salaries for the past selected period (month, quarter) by the number of calendar days in this period, and then by the number of employees in the group. Visually, this formula looks like this:

Employee SDZ = Salary / DN / K,

https://www.youtube.com/watch?v=ytpress

ZP - salary for the period,

DN - calendar days of the period,

K is the number of employees in the group (or the company as a whole).

IMPORTANT! Calendar and working days should not be confused, since the number of vacation days is always counted in calendar days - therefore, earnings for calculating vacation pay should also be counted in calendar days.

1. The final point is to calculate the amount of the reserve itself (do not forget to calculate insurance premiums from this reserve). The final reserve amount will be calculated using the following formula:

Reserve = (employee SDZ × K × DNO) (employee SDZ × K × DNO) × Cst,

DNO - days of unused vacation,

Cst - the total rate of insurance premiums in%.

Read more about the rates of insurance premiums and objects of taxation in our section “Insurance premiums”.

IMPORTANT! The most accurate way to calculate the reserve is to calculate it individually for each employee. In this case, the amount of the reserve will consist of the amount of obligations to each employee. However, if the number of employees in the company is large, this process will be quite labor-intensive.

Example

As already noted, the algorithm for calculating the amount of the reserve is prescribed in the accounting policy, this is due to the fact that PBU 8/2010 does not contain formulas and methods that allow obtaining the value of the reserve.

In addition to the above method, in practice, you can also use one of the following amounts to calculate the reserve:

• wage fund (hereinafter referred to as OT);
• vacation pay paid for the calendar year preceding the year for which the reserve is created (standard method).

The procedure for calculating the reserve amount is carried out in the following steps:

• determination of the average daily wage fund or vacation pay;
• formation of a reserve.

Let's look at examples of using each of these methods.

https://www.youtube.com/watch?v=https:tv.youtube.com

Example 1

(FROM insurance premiums) / 28 × 2.33,

where 28 is the number of vacation days per year for each employee;

2.33 - number of vacation days for 1 month worked.

The reserve is formed at the end of each month. The reserve does not include payments to employees who have not worked for a full month. The reserve amount at the end of 2021 is 0 rubles. The OT values ​​for 2021 are presented in column 2 of Table 1. Insurance premiums - 30.2% (including contributions for injuries).

We invite you to familiarize yourself with: Sample of filling out an application for alimony reduction

Table 1. Reserve calculation

At the end of each month, Molniya LLC will reflect the accrual of the reserve for 2021: Dt 26 (44.20) Kt 96 in the amount from column 4, i.e. as of 01/31/2019 - 10,835, as of 02/28/2019 - 11,918 , as of 03/31/2019 - 13,001, etc.

IMPORTANT! The reserve amounts are reflected in the balance sheet as part of the indicators in line 1540 “Reserves for future expenses.”

Example 2

LLC "Molniya" in its accounting policy recorded the creation of a reserve once a year, based on the payment of vacations of the previous year. According to accounting data, these expenses are 960,000 rubles.

Insurance premiums = 960,000 × 30.2% = 289,920 rubles.

Reserve = 960,000 289,920 = 1,249,920 rubles.

The employee may be entitled to additional paid leave. Such vacation pay must be reflected according to the same rules that we described above. But two points need to be taken into account.

https://www.youtube.com/watch?v=https:accounts.google.comServiceLogin

Firstly, it is safer not to take into account the costs of additional vacation pay not provided for by law when calculating income tax. This is prohibited (clause 24 of article 270 of the Tax Code of the Russian Federation). This means that you will have to calculate and reflect the permanent tax liability (PNO). But only for vacation pay. Contributions from them can be taken into account in any case, and no differences will arise.

Secondly, employees may be entitled to additional leave in connection with the occurrence of a certain event, such as a wedding or the birth of a child. In this case, vacation pay must be reflected without using a reserve, but according to regular expense accounts. After all, it is impossible to predict such events in advance, and, as a result, it will not be possible to reserve funds for them.

Example 4: How to record additional vacation pay

An employee of Mir CJSC Konovalov S.D. had a son in June 2014.
In this regard, according to the internal personnel regulations, he was granted paid leave for three days - from June 9 to 11. The amount of vacation pay amounted to 7947.12 rubles. Insurance premiums from this amount amounted to 2400.03 rubles, and personal income tax - 1033 rubles. Konovalov received 6,914.12 rubles in his hands. (7947.12 - 1033). In addition, since the company is not small, the accountant also assessed a permanent tax liability in the amount of RUB 1,589.42. (RUB 7,947.12 × 20%).

On June 4, he made the following accounting entries:

DEBIT 44 CREDIT 70 - 7947.12 rub. — vacation pay was accrued to Konovalov;

DEBIT 44 CREDIT 69 - 2400.03 rub. — insurance premiums are calculated from vacation pay (broken down by contribution); Important detail: There is no need to reserve funds for unexpected vacations. For example, for additional days on the occasion of a wedding.

DEBIT 99 CREDIT 68 subaccount “Calculations for income tax” - 1589.42 rubles. — a permanent tax liability has been accrued;

DEBIT 70 CREDIT 51 - 6914.12 rub. — vacation pay is listed;

DEBIT 70 CREDIT 68 subaccount “Personal Income Tax Payments” - 1033 rubles. — personal income tax withheld;

DEBIT 68 subaccount “Calculations for personal income tax” CREDIT 51 - 1033 rub. - personal income tax is listed.

Withholding and taxes

The employee received his vacation pay for the entire period, even for the one that he had not yet worked. But personal income tax was also removed from the entire amount. That is, since the employer withholds the payment amount, he must return the tax withheld from the employee. Experts from the Ministry of Finance explain this rather difficult point. It is worth noting that there is no deduction code for unworked vacation days in the 2-NDFL certificate. However, in the 1C program, a situation may arise when the certificate reflects this amount using code 2012 as compensation for unused vacation, but with a minus. But since there was no error on the part of the employer in the month when the deductions from vacation pay were made, no additional amendments need to be made.

After calculating the amount to be withheld, the employer must notify the employee that it may be able to refund some of the tax previously withheld. After a written application from the employee, you can reduce the tax for the last worked period by this amount.

Features of withholding vacation pay for unworked days upon dismissal

As for contributions to the Pension Fund, adjusted data for the period of accrual of vacation pay is submitted, along with data for the current period. In fact, mutual settlement occurs. The employee receives payments taking into account the recalculation of contributions to the Pension Fund.

The employee's debt is forgiven. To avoid misunderstandings with the tax authorities, the tax base in the current period should be reduced by the amount of the unreturned advance. There is no need to adjust personal income tax, pension fund contributions, or reporting.