How does vacation pay work? What you need to know!

Understanding how vacation pay works can be a bit complicated and raise a lot of questions.

How do holidays work and who is entitled to them?

Vacations are a right guaranteed by labor legislation and are nothing more than a period of paid rest granted to workers after a certain period of work.

Therefore, during the holidays, the worker has the right to temporarily step away from his/her professional activities.

This period is intended to give employees a rest, so that they can take care of their physical and mental well-being, providing time to relax and dedicate more time to personal activities.

Therefore, before understanding how vacation pay works, it is important that you know who is entitled to it.

The right to paid vacation is guaranteed by law to all workers who have a formal employment contract, whether they are domestic, rural, urban or temporary employees.

THE CLT (Consolidation of Labor Laws) defines rules and conditions for the enjoyment of this right.

However, these rules can be applied to both private companies and public bodies.

But it is important to remember that to enjoy this right, the employee must have completed the vesting period of 12 consecutive months.

It is worth mentioning that the right to vacation also applies to interns and apprentices.

Therefore, the right to paid vacations covers all workers with a formal employment contract, as long as they have completed at least 12 months of consecutive work.

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What does the law say about holidays?

As we mentioned above, vacations are directly available to workers with signed employment contracts and are provided for by law.

Therefore, understand a little more what it says in legislation about the right to vacation.

Vacation conquest

To be entitled to vacation, the worker must have a signed employment contract and have worked for at least 12 consecutive months;

Holiday duration

According to labor legislation, vacations must last 30 consecutive days, but they can also be divided into up to 3 periods, as long as one of them is at least 14 days long.

Holiday pay

During the vacation period, the worker has the right to receive the amount of his salary, plus the amount corresponding to 1/3 of the salary.

This amount is intended to compensate the worker for the rest period.

Additionally, if there are additional payments and benefits that you normally receive, these must also be included in your vacation pay;

pecuniary allowance

The cash bonus is an option offered that allows the worker to request the conversion of up to 1/3 of the vacation period into cash.

However, the worker must inform the employer 15 days before the end of the acquisition period.

Therefore, it is important to remember that vacations cannot be replaced by any form of compensation, such as a salary reduction or cash payment.

In this way, vacations are a worker's right, with the aim of providing the employee with a period of rest and leisure.

But now that you understand all your rights related to vacations, let's take a step-by-step guide so you understand how vacation payments work.

How to calculate vacation pay?

Discover the acquisition period

The first step is to find out the acquisition period you worked to find out if you are entitled to vacation.

Therefore, a practical example would be: You started working at a company on January 1, 2022, your acquisition period will be until December 31, 2022.

Calculate the value of your daily salary

To find out the value of your daily salary, simply take the value of your monthly salary and divide it by 30 days.

Thus, a practical example would be: A salary of R$ 2,000.00, divided by 30 days = R$ 66.67, therefore, R$ 66.67 is the amount you receive per day.

Find out how many vacation days you are entitled to

It is usually 30 days of vacation, but this may vary depending on your acquisition period, collective agreements or union conventions.

Calculate the value of vacation

To calculate the value of vacation multiply the value of your daily salary by the number of vacation days you are entitled to.

A practical example: If your daily salary is R$ 66.67 and you are entitled to 20 days of vacation, the calculation would be R$ 66.67 x 30 = R$ 2000.00.

Add the additional 1/3

After calculating the value and days, don't forget that you still have the right to receive an additional 1/3 of the vacation value.

Therefore, multiply the value you found for the vacation by 1/3, for example, if you found the value of R$ 2,000.00 for vacation, the calculation will be R$ 2,000 x 1/3 = R$ 666.67.

Calculate the total value of the vacation

To finish, simply add the value of the vacation with the additional 1/3, which in our example will be R$ 2,000 + R$ 666.67 = R$ 2,666.67.

However, it is worth noting that this is just a simple example of calculating vacations, as there are some aspects that need to be taken into account.

These aspects would be possible additions and benefits that can also change the value of the vacation.

It is also worth remembering that for an adequate vacation calculation it will be necessary to include IRRF (Income Tax) and National Institute of Social Security (INSS) discounts.

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Deadline for payment of vacations

Vacation payments must be made according to the period agreed between the employer and the employee, i.e. whether 30 days or in installments.

Therefore, the amount must be paid up to 2 days before the start of each period.

However, it is important that this deadline is respected, otherwise the company may be forced to pay double the amount.

An important observation is also about the start date of the vacation, as it was determined by the CLT that it is prohibited to start any vacation period up to 2 days before holidays or weekends.

Therefore, your vacation cannot start on a Thursday.

Or if a holiday falls on a Wednesday, for example, your vacation cannot start on Monday or Tuesday.

Conclusion

We know that taking a vacation is great, and is also a worker's right provided for by law, but it is important to be aware of all deadlines and amounts.

Therefore, understanding how vacation payments work can help a lot when it comes to controlling your finances and even planning your vacation.

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Given that June 6, 2023

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