Modified regulations for determining average wage in Russia, impacting vacation and pension entitlements.
Starting September 1, 2025, Russia introduces a shake-up in how it calculates average earnings for severance pay, vacation pay, and other employee benefits. According to RIA Novosti, this update is backed by official government documents.
From now until September 1, 2031, the calculations will take a more consistent approach, reducing fluctuations due to various working days in different months. No longer will the actual number of working days or hours be factored in. Instead, fixed average values will be employed to smoothen out the monthly variations.
To begin, the average monthly earnings for calculating severance pay will be found by multiplying the average daily earnings by a constant number of working days in a month. In instances where the sum of hours worked over a certain period is considered, the average earnings will be calculated by multiplying the average hourly earnings by the average monthly working hours.
To provide more clarity and transparency, the calculations will now be based on the actual income credited to the employee’s account rather than estimations that could sometimes distort the truth, especially for those with unstable salaries. Additionally, bonuses will only be accounted for if they are monthly and accrued for the time actually worked. Large annual bonuses may no longer be included in vacation and severance pay calculations[1][2].
The changes affect the treatment of bonuses and ensure more stable monthly payment amounts. Most employees should see only minor alterations in the total payment amounts, but the calculation of premiums will become more closely tied to monthly actual bonuses[1].
Let's delve deeper into the calculation methods:
- For employees with standard work schedules (e.g., five-day workweek), the average daily earnings over the last twelve months will be multiplied by an approximate number of fixed working days, around 21.7 days, rather than the actual working days in each month.
- For employees with irregular or special schedules (e.g., shift work or cumulative hours), the average hourly earnings will be multiplied by an average monthly number of working hours, instead of the actual hours worked in the month.
These adjustments pave the way for more consistent, stable, and transparent calculations, ensuring fairness for all workers[1]. For instance, if an employee's average daily salary were 2,500 rubles, the vacation pay would no longer vary by month due to differences in working days – regardless of whether there are 17 or 23 working days in a month, the amount would be calculated by multiplying the daily earnings by a constant number of working days, leading to a consistent payment amount each month[1].
Businesses in Russia will experience a shift in finance calculations, particularly for employee benefits, starting from September 1, 2025. The new method will provide more consistency in calculating average monthly earnings, eliminating the factor of varying working days and hours.
