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The right of payment of an annual leave allowance or K-15 is established by the General Collective Agreement for the private sector in the area of the economy and refers to all employees in the private sector in the Republic of North Macedonia.
The employers from the private sector have a legal obligation for payment of an annual leave allowance from 1 July until 31 December.
Who is entitled to an annual leave allowance or K-15?
The employees in the private sector are entitled to an annual leave allowance provided the employee is in continuous employment with the employer for at least six (6) months during the calendar year.
How is the amount of the annual leave allowance calculated?
Pursuant the provisions of the General Collective Agreement for the private sector in the economy, the annual leave allowance is paid in the amount of at least 40% of the base salary.
The base salary for the calculation of the annual leave allowance is the average monthly net salary per employee in the Republic of North Macedonia paid in the last three months.
Can you determine an annual leave allowance to a lesser or greater amount of the amount specified in the General Collective Agreement for the private sector of the economy?
The employers who have had difficulties in the performance, assessing the economic and financial situation of the employer, after obligatory prior consultation with the union of the branch i.e. the department, by means of an agreement signed by the employer and the representative trade union, an annual leave allowance can be determined less than the amount specified in the collective agreement.
A greater amount of the annual leave allowance can be determined by its standardization within the collective agreement of the branch or the collective agreement at the rank of the employer.
Is personal income tax and corporate tax paid for the paid annual leave allowance?
Pursuant to Article 15 paragraph 1 line 2 of the Law on Personal Income Tax (“Official Gazette of the Republic of Macedonia’” No.241/18), the compensations related to work determined by the Law on Labour Relations, the General Collective Agreement for the private sector of the economy, the civil collective agreements, the collective agreement at the rank of the employer and the regulations of the bodies of the state administration, are considered as income from work for which a personal income tax is paid in the amount determined in accordance with the provisions of the law.
Pursuant to Article 9 paragraph 1 item 2, line 6 of the Law on Income Tax (“Official Gazette of the Republic of Macedonia No. 112/14, 129/15, 23/16, 190/16 and 248/18, an annual leave allowance in the amount of the minimum amount of 40% determined by the provisions of the General Collective Agreement of the base salary is not subject to taxation of the income tax. The income tax is paid for each payment in the amount of over 40% of the base salary.
Where can the employees, whose employer had not paid the annual leave allowance within the prescribed deadline, i.e. no later than 31 December during the calendar year, complain?
The employees who shall not be paid the annual leave allowance can require an intervention by the State Labour Inspectorate, or initiate proceedings to protect their rights.
Penalties for infringement of the right of annual leave allowance
The legislator imposes a fine of up to 4,000 euros, of which 2,000 to 3,000 euros for the company and from 500 to 1,000 euros for the responsible person in it.
The legislator imposes a sentence of imprisonment of one year for the employers who shall pay the annual leave allowance and then would require the employees partially or fully to return it.
The State Labour Inspectorate supervises the implementation of the payment of the annual leave allowance, after the received report or voluntarily at random.