Holiday pay

If you are paid holiday pay and remuneration at the same time and the total amount you receive is more than 1956,60 euros, you can apply for the recalculation of your work ability allowance.

The recalculation of the allowance is necessary if the entire holiday falls in one or more consecutive months and you receive holiday pay differently from the time you would have received remuneration for the same period – for example, if you take a holiday in August and receive both your remuneration and holiday pay at the end of July, or if you take a holiday in August and September and receive your holiday pay in mid-August and remuneration at the end of August.

To have your allowance recalculated, submit an application to the Unemployment Insurance Fund along with a certificate (payslip) from your employer stating:

• the date(s) of the payments made to you;
• the content of the payments (remuneration, holiday pay);
• the period of the holiday (start and end date).

Also provide an extract from your contract showing the agreed date (payday) on which you are paid your remuneration.

Applications can be e-mailed to toovoimetoetus@tootukassa.ee or posted to Lõõtsa 2a, 11415 Tallinn.

Example – Holiday pay is paid before the holiday (wages are paid at the end of the working month)

A person with partial or no work ability holidays from 1-30 September, and the time agreed with the employer for the payment of remuneration is the last working day of the month worked. The person is paid 1100 euros in remuneration and 1100 euros in holiday pay on 31 August, so the total gross income for August is 2200 euros (i.e. exceeding 90 times the daily rate). The person submits an application to the Unemployment Insurance Fund, along with an employer's certificate proving the duration of their leave, the amount and type of remuneration received and a copy of the employment contract or other comparable paperwork detailing the time of payment of the compensation agreed upon within the company. As the remuneration would have been paid on the last working day of September if the person had worked in September, the Unemployment Insurance Fund performs the following recalculations.

• Holiday pay for September is deducted from the income for August. This leaves the person with income for August of 1100 euros, which is less than 90 times the daily rate, i.e. 1956,60 euros, and the person receives the full amount of the work ability allowance for September.
• Holiday pay received for September is added to other income received in September. If the person has no other income subject to social tax in September (their salary is 0.00 euros because they were on holiday in September), their income for September is their September holiday pay of 1100 euros and they receive the full amount of the work ability allowance for October.

Example – Holiday pay is paid before the holiday (wages are paid in the month after the work period)

A person with partial work ability holidays for 30 days from 17 August-15 September, and the pay date agreed with the employer is the 5th of the month following the month of work. The person is paid 1500 euros in remuneration for July on 5 August and 1500 euros in holiday pay on 14 August. This means that their total income for August is 3000 euros. This is more than 2700,11 euros, starting from which the work ability allowance is no longer payable in the case of partial work ability. This means that without the recalculation they would not receive the work ability allowance for September.

The person submits an application to the Unemployment Insurance Fund and an employer's certificate showing the duration of their holiday, the amount and type of remuneration they received and a copy of their employment contract that details the time of payment of the remuneration agreed in the company. As the holiday falls in two consecutive months, and if the person had worked in August and September the remuneration would have been paid in September and October, respectively, the Unemployment Insurance Fund performs the following recalculations.

• The holiday pay received for August and September of 1500 euros is deducted from the August income, resulting in income for August of 3000 euros - 1500 euros = 1500 euros, which is less than 90 times the daily rate, i.e. 1956,60  euros, and the person receives the full amount of their work ability allowance for September.
• The holiday pay for August (the amount of which is 1500 euros / 30 days x 15 days = 750 euros) is added to the income for September, which is half the August remuneration, i.e. likely to be 750 euros. This means that their income for September is 750 euros for the holiday pay in August + 750 euros for the remuneration in August = 1500 euros, and they will receive the full work ability allowance for October.
• The holiday pay for September (the amount of which is 1500 euros / 30 days x 15 days = 750 euros) is added to the income for October, which is half the September remuneration, i.e. likely to be 750 euros. This means that their income in October is 750 euros for September holiday pay + 750 euros for September pay = 1500 euros, and they receive the full work ability allowance for November.

Example – Holiday pay is paid with the regular salary according to the wage payment schedule

A person with partial work ability holidays from 7-20 July (14 days) and the payday agreed with the employer is the 5th of the month following the month of work. The person is paid 1206,45 euros in remuneration for July on 5 August and holiday pay of 993,55 euros for their 14 days of leave in July. This means that their total income for August is 2200 euros. Since this exceeds 90 times the daily rate, the work ability allowance for September is reduced according to a formula in which 90 times the daily rate of the allowance is subtracted from the income and divided by two: 2200 - 1956,60 / 2 = 121,70 euros. This amount is deducted from the September work ability allowance for a person with partial working ability: 371,75 – 121,70 = 250,05 euros. For a person with partial working ability, the amount of the working ability allowance in September is 250,05 euros.

The work ability allowance is not recalculated, because the wages are paid in the month following the work period. Therefore, the employer was obliged to pay the July salary in August, as well as the July holiday pay, meeting the legally mandated deadline for salary payment. As a result, the person received holiday pay at the same time they would have been paid the salary for the same period, and there is thus no legal basis for recalculating the work ability allowance.

Sickness benefit

The sickness, maternity, and care allowances paid by the Health Insurance Fund are considered to be benefits for temporary incapacity for work.

If you are paid such an allowance for several months at a time and your income therefore exceeds 90 times the daily rate (EUR 1956,60), you can also apply for the recalculation of your work ability allowance.

To have the allowance recalculated, submit an application to the Unemployment Insurance Fund along with an extract from your contract showing the agreed time (payday) for the payment of your remuneration.

You can apply for the recalculation by e-mailing it to toovoimetoetus@tootukassa.ee or posting it to Lõõtsa 2a, 11415 Tallinn.

Final settlement

Compensation for unused holiday days paid within the framework of the final settlement is not subject to recalculation, since pursuant to Section 71 of the Employment Contracts Act the employer is obligated to compensate the employee for any remaining unused and unexpired annual holiday compensation upon the termination of the employment contract.

Similarly, unpaid wages that are paid upon the termination of the employment relationship are not subject to recalculation, since according to Section 84(1) of the Employment Contracts Act all claims arising from the employment relationship become due upon the termination of the contract. Therefore, in accordance with the law, the employer is obliged to pay all earned wages in the month of the termination of the employment relationship.

Example – Refusal of recalculation

The employment contract of a person with partial or no work ability ends on 31 October. The person is paid out a salary for the month of October in the amount of 1400 euros and holiday compensation in the amount of 200 euros. Additionally, the person was paid a salary for the month of September in the amount of 1400 euros on 5 October. The person's total income in October is 3000 euros, and their November work ability allowance is reduced according to a formula where the income is subtracted from 90 times the daily rate of the work ability allowance and then divided by two: (3000 - 1956,60) / 2 = 521,70 euros. This amount is deducted from the November work ability allowance for a person with partial work ability: 371,75 - 521,70 = 0 euros, and for a person with no work ability: 652,20 - 521,70 = 130,50 euros. The work ability allowance for a person with partial work ability in November is 0 euros, and for a person with no work ability it is 130,50 euros.

The work ability allowance is not recalculated because the employer is obliged to pay all earned remuneration (including salary, unused and unexpired annual holiday compensation and other fees and benefits) on the day the employment contract ends, i.e. 31 October. Therefore, there is no legal basis for recalculating the work ability allowance.

Example – The work ability allowance is not reduced

The employment contract of a person with partial or no work ability ends on 2 October. The person is paid a salary for the month of September in the amount of 1200 euros, a salary for two days of October in the amount of 109 euros and annual holiday compensation in the amount of 400 euros. The person's total income in October is 1709 euros, which does not exceed 90 times the daily rate. Therefore, the work ability allowance for the month of November is paid out in full.