Vacation allowance is always a welcome amount.. And knowing that we are recharging our batteries without affecting our monthly income too much allows us to enjoy our rest days more peacefully. spend all our holiday allowance? Wouldn’t it be more prudent to set aside a portion for possible future expenses? For our retirement or for our children’s studies? Naturally, there is no correct answer, as it depends on the amount of the allowance you receive and also on the stage of life you are in. And if you do not have a holiday allowance, how can you do that? to have a value for the holidays?
Are all workers entitled to holiday pay?
Not. Only those who work are entitled to a holiday allowance. (and is not on prolonged leave), civil servants, retirees and pensioners.In other words, self-employed, unemployed receiving unemployment benefits and employees on prolonged leave for more than a year do not receive vacation allowance.Also read: Prolonged illness: Do I lose entitlement to benefits or holidays?
What is meant by holiday allowance?
The vacation allowance is an extra amount that must be paid to those who are entitled and are concerning the vacation days that you are entitled to take. That is, in addition to the salary, the so-called “13th month”.
Vacation allowance amount may not be equal to monthly salary amount
During vacation days you have right to receive your salary as if you were working (Article 264 of the Labor Code). And to this value is added the holiday allowance, which, however,You may not integrate all of the installments that may form part of your monthly salary.
Employees for others
Basic pay; Exemption from working hours; Night work; Shift work.Does not include:For employees, working for more than one year with the same employer, the holiday allowance, includes the amounts received from:Personal allowances; Meal allowances; Travel allowances; Transport allowance; Representation allowance. As all amounts considered are monthly, the amount of the subsidy may be close to the salary you receive at the end of the month.for whom is work for less than a year, despite being entitled to receive a subsidy, its value takes into account the number of months actually worked. And also the fact that you have entitled to two days of vacation for each month worked, with a limit of 20 days.So, for your calculation uses the following formula:Holiday allowance = (payment x 12 months) / (40 hours per week x 52 weeks) ) x 8 hours x 2 days x number of months workedAs for the payment of the allowance, in accordance with the Labor Code, must be done before the vacation period and proportionately in the case of interpolated vacations (article 264).
Public service workers
In these cases, under the terms of article 152 of the General Labor Law in Public Functions, the vacation allowance is equal to one month of the monthly base salary, being paid in June.
Retired and pensioners
For retirees and pensioners the amount is equal to the pension they receive, being paid in the month of July.
Don’t have a vacation allowance?
If you are not entitled to vacation allowance because you are self-employed, consider create your own holiday allowance.From the value he receives for the work he does, put 10% off. If you do it every month, after a year you will have an amount even higher than the amount you receive per month. And you can use it as a holiday allowance. But if, for example, you set aside 15%, you can use it as a holiday and Christmas allowance to which employees are entitled.
What to do with the holiday allowance
1. Create or reinforce your emergency fund
Having an emergency fund is very important. Having six months’ worth of your monthly expenses set aside allows you to be prevented in the event of an unforeseen loss of income resulting, for example, from unemployment or illness. With this fund, you will have a value that will allow you to meet your financial burdens while resolving the situation.Although six months is the value considered as the minimum security the ideal is to have the equivalent of a year.Also read: Emergency Fund: How to build without unbalancing the budget
2. Amortize debts
At a time when interest rates are rising, using part of the holiday allowance to amortizing debts indexed to the Euribor rate is also an option to consider.So, consider using part of your subsidy amount to repay capital on higher-rate credits. Or in which the impact of the rise in Euribor translates into a higher monthly payment increase.
3. Use it on anticipated expenses
At school expenses are always a big part of the family budget and September is, as a general rule, the month in which this burden is heaviest. Therefore, you can use part of your holiday allowance to not be so “tight” in September.payment of IMI. An unavoidable expense for those who bought a house and that can also weigh on the family budget in the month in which we receive the notification from the Finance Department.
4. Take the opportunity to buy what you need for the house
Whether it’s a new sofa, a new table or to replace a broken washing machine, holiday allowance can be a help.
5. Save for retirement
Consider “hoarding” 10% of the allowance for your retirement. Consider investing this amount in Savings Certificates, Retirement Savings Plans or another product that interests you and fits your profile.Also read: PPR, FPR or Retirement Certificates? Which one fits your plans?
A professional writer by day, a tech-nerd by night, with a love for all things money.