How To Calculate Reduction Severance Pay

Table of contents:

How To Calculate Reduction Severance Pay
How To Calculate Reduction Severance Pay

Video: How To Calculate Reduction Severance Pay

Video: Severance Pay Calculator 2022, November

Labor legislation guarantees the payment of average earnings to an employee for any type of reduction. The average salary is paid over two calendar months. In some cases, the payment period is extended by two weeks.

How to Calculate Reduction Severance Pay
How to Calculate Reduction Severance Pay


Step 1

When reducing an employee, it is necessary to make a full settlement with him. Pay compensation for unused vacation days, all salary earned by the employee and two months compensation for the layoff.

Step 2

Average earnings are calculated based on the 12 months that have been worked at the given enterprise. Average earnings do not include social benefits. All bonuses, rewards and incentives must be added to the total amount earned.

Step 3

To calculate the average earnings, add up all the amounts received for 12 months. Subtract social security payments. Divide the resulting amount by 365. Multiply the result by 30, 4. The resulting amount will be a reduction payment for one calendar month.

Step 4

If an employee registered for unemployment within two weeks after the layoff and during this period they could not find a job in their specialty and find a job, the layoff payments are extended by 14 calendar days. That is, the calculated amount of the benefit for one calendar month must be divided by two and the amount received must be paid additionally to the employee.

Step 5

In case of redundancy of an employee who did not manage to work a full calendar year, compensation is calculated from the average earnings of the actually worked period. It cannot be lower than the minimum wage.

Step 6

All disputes arising between the laid-off employee and the employer are resolved in court.

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