Revised salary calculation guidelines set to take effect from September 2025, impacting vacationers and those terminated from their jobs.
Starting next year, Russia will implement new rules for calculating severance pay and vacation pay that will significantly affect the amounts employees receive upon resignation or vacation requests. These changes are a result of a new government decree that replaces the former calculation rules effective until September 1, 2025.
Key Changes
- Standardized Calculation Period: The calculation of average earnings will now be based on the actual time worked over the last 12 calendar months. This eliminates the use of arbitrary calculation periods by employers, ensuring a more consistent and fair calculation.
- Inclusion of All Remuneration Components: The average earnings calculation will cover all types of payments laid out in the company's remuneration policy. This includes base salary, sales commissions, bonuses, additional payments for combined duties, night shifts, and public holidays.
- Exclusions from Calculation: Periods of paid and unpaid leave (including maternity leave), sick leave, employer-fault downtime, and paid days off to care for a disabled child are excluded from the calculation.
Calculation Methods
- For severance pay, it will be calculated by multiplying the average daily earnings by the average number of working days per month (based on the annual number of working days divided by 12).
- For employees working on summarized hours, severance pay is calculated as average hourly earnings multiplied by the average number of working hours per month.
Minimum Pay Guarantee
If the calculated average earnings for a full month are less than the federal minimum wage (22,440 rubles in 2025), the employer must pay the difference when calculating severance or vacation pay. This ensures that severance and vacation pay will not fall below the legal minimum wage level.
Impact on Amounts Received
- Employees are likely to receive higher severance and vacation pay because the new rules incorporate bonuses and other incentives, which were sometimes excluded before.
- The standardized 12-month period removes employer discretion that could have artificially lowered payments.
- Excluding leave and sick periods from the calculation means that only actual worked time earnings influence payments, avoiding distortions.
- The legal floor set by the minimum wage further protects workers from receiving excessively low severance or vacation payments.
In summary, these new rules aim to be more transparent, fair, and beneficial to employees by including full remuneration components, standardizing calculation periods, and guaranteeing minimum wage levels for severance and vacation pay starting September 1, 2025.
- The new rules for calculating severance pay in Russia's business sector, effective from September 1, 2025, will encompass all remuneration components, such as personal-finance items like bonuses and commissions, to provide employees with a more comprehensive and fair settlement upon resignation.
- To ensure workers receive a fair level of personal-finance support during business-related absences, the new rules in Russia's government decree exclude periods of paid and unpaid leave from the calculation of average earnings for severance and vacation pay, focusing only on actual worked time earnings.
