Changes in average salary calculation in Russia from September: Vacation and retirement benefits will be incorporated differently
Fast Facts:
Beginning September 1, 2025, revised rules governing vacation pay and severance packages in Russia are going to take effect. Here's what you need to know:
Photo: Svetlana MAKOVEEVA. [Link to Photo Bank KP]
Summer's here, and vacations are on everyone's mind. But with the new rules on the horizon, you might be wondering if you should take your leave earlier or wait it out. Let's break it down for you.
As of September 1, 2025, changes will be made to the way average earnings are calculated, affecting both vacation pay and severance packages. These updated calculations will replace a series of older ones, consolidating them into one, and making some necessary clarifications. This revised document will be valid until 2031.
NEW APPROACH TO VACATION PAY
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Currently, the average daily wage for vacation pay is calculated using the formula: annual income divided by 12 months, then divided by the average number of calendar days in a month (29.3). After September 1, this formula remains unchanged but with a twist—only when an employee's circumstances fit neatly into the simplest case: a standard salary, no leave taken, and no sick days during the calculation period.
Here's an example of how this works: if manager Andrei earns 100,000 rubles a month, and he takes a 14-day vacation, both the old and new rules would result in a daily wage of 3,412 rubles, and the vacation pay would be 47,768 rubles (3,412 x 14).
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SHIFTING GEARS ON SEVERANCE PAY
There are a few modifications to the severance pay calculations in the works:
- Currently, severance pay calculations are based on the actual number of working days in the month of termination. For instance, if an employee leaves in January, which usually comes with fewer working days, their severance pay will be smaller. By September 1, however, calculations will be adjusted, and they will be based on the average number of working days in a month over the entire year (total working days per year divided by 12). For example, 20.58 days for 2025.
- In a simplified example, if manager Andrei leaves in June 2025, which typically sees fewer working days, his severance pay, according to the current rules, would be 4,838.71 × 19 (number of working days in June) = 91,935.49 rubles, while the new standard would offer him 4,838.71 × 20.58 (the average number of working days in 2025) = 99,580.6 rubles.
VARIABLE WORKING CONDITIONS
It's worth noting that the simplified rules mentioned above will not apply in cases where employees have taken leave or been sick during the calculation period. Clarifications will also be made regarding how to count the days or hours, and what components of an employee's income should be included during the calculation period[1].
Starting September 1, only payments made for worked periods will factor into the calculation. This means that payments like sick leave and maternity leave won't contribute to the average wage, leading to a potential reduction in vacation pay for those who have been unwell during the year. Similarly, taking sick leave before resignation could result in a decrease in the severance pay amount[2].
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The smart time to take a vacation in 2025
While nothing changes for the better in September for vacation pay, keep in mind that the more holidays a month contains, the less favorable it becomes for vacation, as the cost of a working day tends to increase. The most favorable months for vacation in 2025 are July and October, boasting 23 working days each. The least favorable among the remaining months are June and November, with 19 working days each.[3]
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[1] [Source][2] [Source][3] [Source]
- In the business sector, alterations to the calculation of average earnings in September 2025 will affect both vacation pay and severance packages, especially for employees who have taken leave or been sick during the calculation period.
- Concerning the industry and finance, the revised rules in Russia from September 2025 will result in changes to the way severance pay is calculated, and only payments made for worked periods will factor into the calculation, potentially reducing vacation pay for those who have been unwell during the year.
