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Deductions for compulsory state social insurance from vacation pay
Deductions for compulsory state social insurance from vacation pay
We are seeking an answer to our question regarding the deduction of compulsory state social insurance (CSSI) from wages. How is CSSI calculated if an employee's vacation spans from one month to the next? In this case, is the vacation pay combined with the wage amount for the first month and then subjected to CSSI, or is the vacation pay for each month calculated separately with the wage amounts for those months, and CSSI is calculated and deducted separately for each?
In response, the State Tax Service under the Ministry of Economy has indicated that the income tax, social contributions, and unemployment insurance reports provided by the employer should sum the employee’s wages and vacation payments for each month based on the days worked.
According to the first part of Article 140 of the Labor Code (Procedure for Calculating and Paying Average Wage for Vacation Time), the average wage paid for vacation time is determined based on the average wage of the 12 calendar months preceding the month of vacation, regardless of the work year for which it is given.
To determine the wage for vacation days, the total wage for the 12 calendar months preceding the vacation is divided by 12 to find the average monthly wage, and this amount is then divided by the average number of calendar days in a month—30.4—to determine the daily wage amount.
The calculated daily wage amount is then multiplied by the number of calendar days in the vacation period.
What about when an employee has worked less than 12 months? The second part of Article 140 of the Labor Code states that for employees who have worked less than 12 calendar months, the average monthly wage is calculated based on the actual full calendar months worked.
It has been stated that when compensations are paid, the compensation amounts for full working years are calculated separately, including the compensation for unused vacation in the current work year, which is subjected to personal income tax and compulsory state social insurance separately from the wage for the payment month. The income tax, social contributions, and unemployment insurance reports provided by the employer should sum the employee’s wages and vacation payments for each month based on the days worked.
Additionally, for income tax purposes, 200 manat is deducted from the compensation amounts calculated separately for each year as specified by Article 102.1.6 of the Tax Code.
We are seeking an answer to our question regarding the deduction of compulsory state social insurance (CSSI) from wages. How is CSSI calculated if an employee's vacation spans from one month to the next? In this case, is the vacation pay combined with the wage amount for the first month and then subjected to CSSI, or is the vacation pay for each month calculated separately with the wage amounts for those months, and CSSI is calculated and deducted separately for each?
In response, the State Tax Service under the Ministry of Economy has indicated that the income tax, social contributions, and unemployment insurance reports provided by the employer should sum the employee’s wages and vacation payments for each month based on the days worked.
According to the first part of Article 140 of the Labor Code (Procedure for Calculating and Paying Average Wage for Vacation Time), the average wage paid for vacation time is determined based on the average wage of the 12 calendar months preceding the month of vacation, regardless of the work year for which it is given.
To determine the wage for vacation days, the total wage for the 12 calendar months preceding the vacation is divided by 12 to find the average monthly wage, and this amount is then divided by the average number of calendar days in a month—30.4—to determine the daily wage amount.
The calculated daily wage amount is then multiplied by the number of calendar days in the vacation period.
What about when an employee has worked less than 12 months? The second part of Article 140 of the Labor Code states that for employees who have worked less than 12 calendar months, the average monthly wage is calculated based on the actual full calendar months worked.
It has been stated that when compensations are paid, the compensation amounts for full working years are calculated separately, including the compensation for unused vacation in the current work year, which is subjected to personal income tax and compulsory state social insurance separately from the wage for the payment month. The income tax, social contributions, and unemployment insurance reports provided by the employer should sum the employee’s wages and vacation payments for each month based on the days worked.
Additionally, for income tax purposes, 200 manat is deducted from the compensation amounts calculated separately for each year as specified by Article 102.1.6 of the Tax Code.