Whose interests are served by paying vacation pay before vacation?
The holiday pay is paid in full on the penultimate working day before the start of the holiday at the latest. Such a duty is incomprehensible today. In general, around the world, it is considered a good tone if employees' incomes are more or less evenly distributed on a monthly basis and at least a minimum income is guaranteed.
Both our current government and the statistics of the Tax Office give opposing views on people's investment and management skills.
The Tax Board shows with the statistics of employees' tax-free applications that employees trust the money for free to the Tax Board rather than invest it themselves. Of course, the Tax Office also lobbies hard for people to deposit their money in their account for free. But the government, through the pension reform, announces that all people know how to invest better than investment managers working in banks.
Pension funds however, unlike the Tax Office's deposit, they have been productive so far.0
This legal provision only causes headaches for all parties.
Don't understand what its purpose is? Is it a wish that people can invest faster, even though the statistics do not support this claim, or is it a favor to spend quickly? Starting with the headache of the employee, who generally receives less money, thanks to the wonderful nuances of calculating income tax. In addition to the above, holiday pay tends to run out before the next payday. This is how we reached a positive result, it supports the quick loan business and the spending also has a positive effect on the state budget. But if you are the average Estonian who spends his holidays outside of Estonia, the state budget will not be happy about it. But when this hangover ends and you start paying back the loan payments with interest, it may take several months before you get back on track. In addition to the above, when most people are on vacation, accountants can constantly calculate and pay out vacation pay to others at the expense of their vacation. Since you will receive a smaller payment, you definitely want to discuss it with the accountant, it promises to be a pleasant conversation.
Does paying holiday pay according to the law still make sense to you?
If not, then
- A: submit a statement to the employer that you want the holiday pay to be paid out together with the salary.
- B: Propose an amendment to the law.
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