How to calculate the work settlement and what are the procedures

The settlement calculation You must do so because according to federal labor law you have the right to collect it if you voluntarily quit, and say that you and the employer have agreed to terminate the employment relationship.

How the settlement calculation is calculated

In this situation, for the settlement calculation You must take into account or your employer must consider what the Law indicates regarding the proportional parts.

Assuming that it is the first year of your job, it is considered 6 days of vacation, the vacation bonus, 15 days of Christmas bonus and the wages that were pending collection.

Settlement calculation example

From data such as the integrated daily salary, the monthly salary, the date of entry and the date of withdrawal of the worker, it is possible to make the settlement calculation taking into account that it will always be due to your resignation as a worker that you voluntarily present to your employer.

Assuming that until your resignation you have worked 180 days, with a daily salary of $ 200, 15 days of Christmas bonus, 6 days of vacation and with a 25% vacation bonus, you will perform this calculation:

You will start by calculating the proportional part of the bonus by dividing the bonus days by the 365 days of the year and it will give you a factor per day worked. In this case the result is 0.04109. You will multiply the factor per day worked by 180, the days you worked. In this case you will get 7.39 days. Then you will multiply 7.39 days by the daily salary 200. You will get as a result $ 1478.
Then you will calculate the proportional part of vacation with these data, the daily salary of $ 200, the 6 days of Christmas bonus and the 180 days that you worked.
You will divide the 6 days of Christmas bonus by the 365 days of the year. You will get the factor for days worked: 0.0164. You will multiply the factor per day worked by the 180 days you worked and you will get 2.95. Then you will multiply this value by 200 which is the daily salary and it will give you $ 590.
Now you will multiply 590, the proportional part of vacation by 25% to get a vacation premium of $ 147.5.
Finally, you must add up all the data you obtained: the proportional part of the Christmas bonus $ 1478 + the proportional part of the vacation $ 590 + the vacation premium $ 147.5. Then the final result of the settlement will be $ 2215.5.

When making the calculation you must take into account that there may be days worked that you owe that must be included as well as taxes are deducted and even depending on your seniority if you exceed 15 years you must add the premium for seniority and you should also consider that not compensation is included.

Calculation of settlement by voluntary resignation

If you voluntarily quit according to federal labor law, you are entitled to a settlement calculation because it is considered as the end of an employment contract in common agreement by both parties.

1.The calculation must include the wages that could be found pending collection, the vacation bonus, the proportional vacation days and the proportional fifteen days of bonus.

Also included in the settlement are the proportional payment of benefits such as utilities, savings fund, commissions, vouchers and bonuses, the seniority premium considering 12 days for each year you worked in the event that you have a collective labor contract.

When a settlement corresponds

If you quit your job voluntarily.
If your temporary employment contract ended or you completed the project for which you were hired.
If you are fired in a justified or unjustified way.
If you decide to terminate the contract because your boss committed a serious misconduct.
Due to the death of the worker.
If you were classified as disabled due to illness, in which case you will receive a disability bonus and a seniority bonus.

Calculation of severance pay for dismissal

According to what is governed by federal labor law, you should be guided by the following:

Article 48 of the federal labor law indicates that first of all, in the event of an unjustified dismissal, you can go to the conciliation and arbitration board to request that you be reinstated to the work you were doing or request compensation whose amount will be equivalent to 3 months of salary updated to the date of payment.

If at the time of the trial your boss cannot prove the cause of the dismissal, you have the right to receive payment of the wages due from the date of dismissal and up to a maximum of 12 months.

Article 50 of the federal labor law indicates that if you had an employment relationship that was determined for a period of time of less than a year, you will be entitled to an amount according to wages considering half the time of the services you provided, but if the period of time exceeds the year, you correspond an amount identical to the salaries of the 6 months of the first year and 20 days for each following year that you provided services.

If you have had an employment relationship for an indefinite period of time, you will be entitled to compensation calculated for 20 days of salary for each year of services rendered.

Therefore, if you had an employment relationship for a certain time in a period of time of less than 1 year, the compensation is calculated by a salary for half the time worked.
If the employment relationship exceeded a certain period of one year, you will calculate as a settlement a salary of 6 months for the first year and a salary of 20 days for subsequent years.
If it was an employment relationship for an indefinite period, you will receive a settlement of 20 days of salary per year.
In addition, in all cases you must calculate the proportional part of the bonus, the seniority bonus, the vacation bonus and the annual bonus in addition to past due wages.
However, to correctly calculate the settlement you must bear in mind that the proportional part is 15 days of salary, the vacation bonus is a minimum of 25% of salary according to the number of days that correspond to you and the seniority premium It is 12 days of salary per year and it will not be less than one minimum salary nor more than two.

For this reason, you must know what your integrated daily salary is, the net salary and benefits such as the vacation bonus and the Christmas bonus.

Settlement calculation in excel

To do the settlement calculation in excel, handle that way by opening a new spreadsheet.

In column A 5 write the word worker and in column B5 write the name of the worker.
In column B6 write the date of entry of the worker
In column B7 write the end date of the employment relationship.
In column B8 write the age in days.
In column B9 write the seniority in years.
In column A12 write Concept, in column B12 write “amount in days”, in column C12 write Daily salary and in column D12 write amount in $
In column A13 write “Aguinaldo, in column B13 enter the value of the amount in days, in column C13 enter the value of the daily salary and in column C13 enter the amount in $
In column A14 write “Vacation” and in Column C14 enter the value in $.
In column A15 write “Vacation premium”, in column B15 enter the amount in days and in column C15 enter the amount in $.
In column A16 write Totals and add column B15 and D16.
Leave a blank row and write in column D 19 the daily salary data, below the bonus days in the year, below the percentage of the vacation premium, below the vacation days and below the start date.

Download: Settlement calculation simulator in excel