Holiday pay is to be paid to the employee no later than the second-to-last working day before the start of the holiday, unless the employer and employee have agreed otherwise (Employment Contracts Act § 70 subsection 2).

There are two options for calculating holiday pay:

• Retaining the agreed salary
• Based on the average daily wage over the past six months

The option of retaining the agreed salary can be used if the employee has a fixed monthly salary and there have been no salary changes in the last six calendar months. If the salary has been increased during this period, a more favorable option for the employee can be applied, and the agreed salary can continue to be paid.

If the salary is variable, holiday pay must be calculated based on the average daily wage of the last six calendar months.

To ensure accurate payroll, the employee’s absences (illness, holiday) must be added to the calendar. Events can be added via Payroll -> Calendar -> Add event.

When adding an event to the calendar, the appropriate event type must be selected:

• Holiday with salary retention
• Holiday based on the 6-month average (excluding public holidays)

NB! Once the event is in the calendar, holiday details will be loaded from the calendar when entering new salary details for the employee, and pay will be calculated accordingly.

Advice: If you use the option of creating the new salary based on the employee’s previously calculated salary, data will not be loaded from the calendar. Therefore, it is advisable to simply add a new salary.

Useful reading can also be found on the rmp.ee website.

For additional questions, please write to us at support@simplbooks.ee.