How is the 13th salary calculated and when is it paid?

Some organizations reward their employees with additional monetary rewards - the so-called 13th salary. What is it and how is this payment calculated, who is entitled to it, whether the employer is obliged to issue it according to the Labor Code at the end of 2020, and other important nuances you will learn from our article.

Also see: “Salary payment deadline for December 2020“.

Legal basis

Labor legislation does not contain information about such payments. Including how the 13th salary is calculated. But Article 191 of the Labor Code of the Russian Federation stipulates the possibility of encouraging labor in any of the following ways:

• declare gratitude;
• issue a diploma or certificate;
• give a valuable gift;
• award a cash prize.

Moreover, the rights of the organization (IP) are not limited to the listed points. It is possible to introduce other forms of incentives. For more information, see “Types of bonuses and rewards: making a choice.” In this regard, we can say that 13 salaries can be paid at the employer’s discretion to anyone: a pensioner, someone resigning of their own free will, or anyone else.

From a legal point of view

The Labor Code of the Russian Federation does not oblige the employer to pay bonuses to employees, while reserving such a right to them (Article 191 of the Labor Code of the Russian Federation). As a rule, bonuses are given in monetary terms, however, labor legislation does not clearly define what they should be. An employer can encourage employees to:

• Verbal gratitude;
• Issuance of an honorary diploma or certificate;
• Presentation of a valuable gift.

In our case, the thirteenth salary is gratitude expressed in monetary terms. It should be calculated in the employer’s understanding based on the company’s annual turnover, which must be stipulated in the company’s local regulations and the collective agreement. If these entries are missing from the documents, then it will not be easy to reflect payments to the accountant in a legal way (we are generally silent about issuing bonuses “in an envelope”). A situation may arise when the corresponding notes are there, but at the end of the year the company suffered losses. It turns out that the employees worked “with a plus sign” throughout the entire period, and in December they received a “shish” from their superiors. If desired, the offended employee can go to court to restore justice. In this case, there is judicial practice, where courts often oblige the employer to pay the employees regardless of financial difficulties. In any case, notes in local acts and collective agreements on the annual bonus are extremely binding. As they say: “You called yourself a load, get into the back.”

Mandatory bonus at the end of the year

The employer pays 13 salaries on a voluntary basis. Whether there will be progress in its direction or not depends not only on the performance of employees, but also:

• organization capabilities;
• current remuneration system.

If the company suffered losses at the end of 2020, additional remuneration is usually not paid. And this is not a violation.

A different situation arises if there is a clause on annual bonuses in the company’s internal documents. Do they have the right to deprive 13 of their salaries in this case? The answer is clear: no. After all, this rule was established by the enterprise itself. It has undertaken to encourage high-quality work with monetary rewards, for which a special financial reserve must be created. If an employee deserved a bonus but did not receive it, when he goes to court, he will be able to restore justice.

The thirteenth salary is the annual payment to employees of the enterprise at the end of the calendar year. They are paid during the New Year holidays and are an unregulated form of incentives and bonuses.

The concept of the thirteenth salary

The thirteenth salary is usually called additional payments to the employee that are made every year. Most often it is paid on the eve of the New Year holidays. This is due, first of all, to the peculiarity of the formation of 13 salaries, which is most often used in companies: it is paid based on the financial result of the company for the year, as well as the undistributed wage fund.

It would be more correct to call such payments bonuses to employees based on the results of the current year. The name “thirteenth salary” has become popular among people, because most often its amount is equal to the average monthly salary.

How the 13th salary is calculated in Russia

The concept of “thirteenth salary” is used mainly only by staff in everyday life. Labor legislation does not regulate such a payment, so the accounting department does not have the right to register it as the employee’s next salary based on the results of a month that does not exist.

The enterprise independently determines:

1. How are 13 salaries calculated?
2. What indicators does it depend on?

All nuances must be spelled out in internal documents: collective agreement, bonus regulations, labor regulations, charter. Some innovations from 2020 in this regard will only affect small businesses. Management sets a budget for such payments, and the accountant distributes the funds.

Is 13th salary taxed?

Whether taxes will be withheld from the thirteenth salary depends on:

• on the reasons for its accrual;
• source of payment.

When calculating income tax, the amount of 13 salaries is taken into account in the list of expenses if two points are met:

1. the remuneration is specified in the internal documents of the enterprise;
2. Remuneration is based on production results.

The source of payment will not matter in the cost of the bonus amount at the end of the year, if this is not specified in local regulations, in internal agreements and is paid exclusively at the request of the employer.

Personal income tax is withheld from all payments to workers, regardless of the source of finance.

Remuneration based on the results of the year must be taken into account in the personal income tax tax base for the period in which it was accrued. Tax is withheld upon disbursement of funds upon receipt.

The thirteenth salary also includes insurance premiums for accidents at the enterprise and occupational diseases.

Thus, the thirteenth salary is subject to the same tax as the remaining payments of each month.

Who gets the 13th salary?

Year-end bonuses are usually given out on an ongoing basis in large companies or government agencies. To issue them, you need well-organized work of personnel specialists and competent execution of documents. The introduction of such an incentive system should not cause any particular difficulties.

Who exactly the funds will be credited to depends on the manager. Since the 13th salary is a method of encouragement, employees who have shown good results during the year and have not violated labor discipline will be able to count on it.

What to follow regarding how the 13th salary is calculated:

1. Labor Code, art. 191 – incentives for work activities;
2. Tax Code, art. 255 – funds included in labor costs.

How to apply

In accounting, the “thirteenth salary” is issued under a different name. According to the organization’s documents, it can go like this:

1. Year-end bonus for all employees of the enterprise.
2. Cash rewards for individual employees for achieving excellent results.
3. Bonuses for specialists due to their high level of qualifications.

It is important to make a choice before calculating the 13th salary.

The next step is issuing an order to provide a bonus on form T-11 or T-11a. The text provides reasons for the decision: exceeding the norm, increasing labor productivity, making proposals for savings, etc.

Reasons for reducing payments may be violation of safety regulations, non-compliance with labor discipline, etc.

You can download the forms of these standard orders on our website using the link.

The source of payment of 13 salaries may be a material fund created by management in order to reward good employees.

Some owners issue funds from retained earnings from previous years (JSC and LLC). Information about this should be in the charter. It is needed to process accounting transactions.

What influences the amount of money allowance?

The amount of the bonus in 2020 may be affected by the length of time a person has worked for the company. That is, if a person works at an enterprise:

• Up to 3 years - 50% of the salary (for clarity, it is worth familiarizing yourself with the average salaries in Russia).
• From 3 to 7 years – 80% of the salary.
• More than 7 years – 100% salary.

Important: payment of these funds will be carried out in accordance with the decree of the T-11 or T-11A format (if the payment is only for a certain category of employees).

As for public sector workers, things are a little different here.

All issues of payment of bonuses for employees of institutions belonging to this category in Russia are regulated at the legislative level.

For example, the answer to the question whether teachers are entitled to 13 salaries is yes. The size of the bonus is determined based on the law.

Thus, teachers are entitled to 13 salaries, the amount of which is equal to the so-called net rate of their salary (different from the gross salary).

Also, the enterprise can set a fixed amount of the required 13th salary.

As a rule, when determining the bonus due to an employee, the time worked by him in 2020 is taken as a basis and compared with the standards, on the basis of which the coefficient is calculated.

Once calculated, the resulting data is multiplied by the basis used to determine the premium amount.

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How is the 13th salary calculated?

The calculation procedure differs depending on the payment method.

Fixed amount

Used in cases where a bonus is assigned to some employees. The size of the bonus can be set in different ways at the discretion of the employer.

EXAMPLE Management has established in internal regulations how salaries for 2020 are paid to certain categories of employees. At the beginning of 2020, fixed amounts will be issued, which are:

• for management staff - 60,000 rubles each;
• for sales agents – 25,000 rubles each;
• for employees of the financial department - 32,000 rubles each.

Percentage of salary or calculation coefficient

Bonus payments can be differentiated according to certain criteria. For example, length of service, number of sales made, etc. Then the formula for calculating the 13th salary based on salary will be as follows:

• PREMIUMmax. – the largest amount of money that an employee can receive, according to the internal bonus rules;
• Drab. – number of working days per year;
• Dr. – the number of days actually worked per year.

PREMIUMmax. = SALARY × % Keep in mind: the amount may increase throughout the year, this must be taken into account.
In addition, the employer must not only inform in local documents how the 13th salary is calculated, but also deduct income tax from it to the budget. Example According to the bonus regulations, employees who have worked for a year in full (taking into account the main vacation) are given a bonus in the amount of 40% of the salary. Sales representative Topolev was on annual leave for 20 working days and 7 working days on vacation at his own expense. His salary is 36,700 rubles. How to calculate the 13th salary for an employee for 2020?

Solution

1. Let us determine the maximum share of funds paid to Topolev subject to the conditions of the bonus provision: 36,700 × 40% = 14,680 rubles.
2. Let's calculate the number of days actually worked by the employee. According to the production calendar, in 2020 the number of working days is 247. To receive the full bonus, you need to work 227 days (minus 20 days of required rest). Topolev worked: 3 – 27 = 220 working days.
3. Here's how to calculate the 13th salary for Topolev, taking into account the time he worked:

Also see Bonuses and Income Tax: Taxation Rules.

Average annual earnings

The most labor-intensive process for calculating bonuses at the end of the year. The accountant will need certain information: the amount of the employee’s income for the year, the number of employees in the department, length of service, etc.

Now about how the 13th salary is calculated based on average annual earnings:
Salary.sr.g. + Pstage

• P salary average year – bonus from average annual income;
• Experience is cash payments provided for length of service.

Example

Construction calculates bonuses based on the average annual earnings of employees (indicated in the bonus regulations). How is the 13th salary of installer Larionov calculated if the bonus from the average annual income is 12,000 rubles, and additional payments for length of service are 6,300 rubles?

Solution
12,000 + 6,300 rub. = 18,300 rub. must pay Larionov 18,300 rubles.

Calculation of the thirteenth salary

Due to the fact that the payment of the thirteenth salary is not regulated by law, the employer has the right to independently decide how it will be calculated. Typically, management determines what budget will be allocated for the payment of bonuses at the end of the year, and the accounting department deals directly with the distribution. At the same time, employees who are directly involved in calculations rely on the internal regulations of the organization.

The company's regulations must stipulate exactly how the amount of the annual bonus is calculated. It must also be established in what cases an employee may be deprived of an annual bonus. It can be:

• manufacturing defects;
• absenteeism;
• disciplinary action;
• other mistakes at work.

Read more about the reasons for deprivation of bonuses in the article: → How is employee deprivation of bonuses carried out? Reasons, design.

Other features of salary calculation may also be established. So, it can be paid:

• all employees of the organization;
• only to those employees who have made any special contribution to the general cause of the company;
• those who have certain qualifications or length of service in the organization.

The most common methods for calculating the thirteenth salary are presented in the table.