Many people do not realize that unused leave can be converted into a cash equivalent. It is worth knowing precisely how to calculate the amount to avoid misunderstandings between the worker and the employer. This article explains what rules apply to the calculation of the equivalent and what to draw attention to, so that everything is lawful.
When is the equivalent for unused leave?
The equivalent for unused leave shall be payable to the individual erstwhile the employment relation is terminated or terminated and the individual has not utilized his leave in full or in part. It does not substance why the employment has been terminated – the equivalent should be applied in each case. As the case law underlines, the right to leave in kind is converted to the right to a monetary equivalent on the date of cessation of employment. However, it must be borne in head that the claim for a limitation allowance is made after 3 years (cf. judgement of the ultimate Court of 29 March 2001, act mention I PKN 336/00).
It is besides worth noting that an employer is not obliged to pay an equivalent if the worker decides to usage unused leave during another employment contract with the same employer. However, the condition is that the fresh contract will be concluded immediately after the termination or expiry of the erstwhile one.
How do I calculate the base of the equivalent?
When calculating the equivalent for unused leave, it is crucial to establish the alleged equivalent base. To this end, consideration should be given to the different components of remuneration, but not all. The following shall be excluded from the equivalent base:
- one-time or non-periodic payments for circumstantial tasks or achievements,
- remuneration for the time of readiness to work or downtime not guilty by the employee,
- Jubilee gratuities,
- remuneration for periods of remainder leave or another justified absence,
- cash equivalent for vacation leave,
- the additional wage of the legal advisor for legal representation,
- remuneration for time of incapacity for work due to illness,
- the amount of compensation to the minimum remuneration,
- awards from the share prize fund,
- pension, pension or another cash checks,
- remuneration and compensation for termination of employment.
The another components of the remuneration are divided into 3 groups:
- Ingredients specified at the fixed monthly rate – they shall be taken into account in the period of cessation of employment.
- Ingredients for periods not longer than 1 period in variable amounts – the average of the last 3 months shall be taken into account.
- Ingredients for periods longer than 1 month – the average of the last 12 months shall be taken into account.
Examples of calculations
- Internship allowance
The worker employed until the end of January 2025 receives a basic wage of PLN 6000 and an internship allowance (PLN 500). The calculation of the equivalent base takes account of both components, i.e. a full of PLN 6500. - Remuneration
The worker receives a commission salary: in October PLN 7000, in November PLN 6800, in December PLN 9000. The average of 3 months is PLN 7600, which is an equivalent basis. - Half-year bonuses
The worker received 2 half-year bonuses in 2024. In determining the equivalent base, account shall be taken of 1/12 of the sum of these premiums.
Once the equivalent base has been established, the equivalent for unused leave may be calculated. To this end:
- The equivalent base shall be divided by the coefficient (in 2025: 20,83 for January and 20,75 for February to December) to get the equivalent per day of leave.
- The equivalent per day of leave is divided by the number of hours corresponding to the regular working time standard (usually 8 hours).
- The equivalent for 1 hr of leave is multiplied by the number of hours of unused leave.
Example for part-time
A individual employed on a 1/2-job has 16 hours of unused leave. His wage is PLN 8,000 per month. The calculations are as follows:
- 8000 zł : 10,38 (rate for 1/2 jobs) = 770,71 zł (equivalent for 1 day of leave).
- 770.71 zł : 8 hours = 96.34 zł (equivalent for 1 hr of leave).
- PLN 96.34 x 16 hours = PLN 1541.44 (equivalent for unused leave).
Summary
Calculation of the equivalent for unused leave requires taking into account many factors, specified as wage components, employment periods and working time standards. It is worth remembering that the employer is obliged to pay the equivalent unless the worker decides to usage the leave during another employment contract. cognition of the rules for calculating the equivalent avoids errors and misunderstandings.
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Legal basis
• Article 171, Art. 291 par. 1 of the Law of 26 June 1974. – Labour Code (i.e. diary of Laws of 2023 item 1465; last edition of diary of Laws of 2024 item 1222)
• Article 1 of the Act of 6 December 2024 on the amendment of the Act on days off from work and certain another laws (Journal of Laws of 1965)
• paragraphs 14 to 19 of the Decree of the Minister of Labour and Social Policy of 8 January 1997 on the detailed rules for the granting of leave of rest, the fixing and payment of remuneration for time of leave and the cash equivalent for leave (Journal of Laws No. 2 item 14; Last diary of Laws of 2009 No. 174 item 1353)
Continued here:
How to calculate the equivalent for unused holiday
