The final settlement is an essential document that every worker should know. It is the balance receipt that the company provides to the employee when the employment relationship ends, regardless of the reason: dismissal, voluntary resignation, or contract termination. This document lists all the amounts that the employer must pay the worker for accrued but unpaid concepts up to the date of contract termination.
Understanding how to calculate the final settlement is crucial to protect your labour rights and verify that the company meets its obligations. Often, the final settlement is included in the last payslip received by the worker, but its components must be calculated specifically and rigorously. It is not a compensation but what legitimately belongs to the employee for the work done and the rights not enjoyed.
The calculation of the final settlement includes several elements that vary according to the particular situation of each worker. The most common components are the days of unpaid salary since the last payslip, the proportional part of any extra payments if not prorated, accrued but unused vacation days, pending overtime, and other salary supplements that have been agreed upon. The sum of all these gross concepts forms the amount of the final settlement before applying deductions.
Step 1: Salary for Days Worked After the Last Payslip
The first step in calculating the final settlement is to determine how much the worker should be paid for the days worked in the month in which their contract ends. To do this, it is necessary to calculate the daily salary by dividing the monthly salary by 30 days. If the salary is variable or has changed over the past few months, the previous complete month should be used as a reference.
For example, if a worker with a monthly salary of 1,500 euros is dismissed on December 9, the calculation would be: 1,500 euros divided by 30 days results in a daily salary of 50 euros. Then, multiply 50 euros by the 9 days worked in December, obtaining a total of 450 euros for this concept. This is just the first component of the final settlement and does not include other pending rights.
Step 2: Accrued but Unused Vacation Days
Unused vacation days often represent the most significant part of the final settlement. All workers are entitled to paid vacation each year, and if they do not take it before the end of their employment relationship, the company must pay for it in cash.
To calculate this amount, first, determine how many vacation days correspond to the year according to the collective agreement or the contract (usually 30 calendar days). Then, apply a rule of three to determine how many vacation days have accrued up to the termination date. If the worker was hired for 339 days of a year and is entitled to 30 vacation days for 360 days, they will be entitled to 28.25 vacation days. By multiplying these days by the daily salary, you obtain the economic value of the unused vacation days.
Continuing with the previous example, 28.25 days multiplied by 50 euros daily results in 1,412.50 euros that the company must pay for unused vacation days. This amount must be explicitly stated in the final settlement.
Step 3: Accrued but Unpaid Extra Payments
If the extra payments are not prorated (i.e., if they are paid in full during certain months of the year such as summer and Christmas), the proportional part accrued since the last extra payment received until the termination date must be calculated.
To make this calculation, divide the amount of the extra payment by the number of days in the period (normally 182.5 days for six months) and multiply by the days elapsed since the last extra payment was received. If a worker receives extra payments of 1,500 euros every six months and was dismissed 162 days after receiving the last payment (from July 1 to December 9), the operation would be: 1,500 euros divided by 182.5 days results in 8.21 euros per day. Multiplying by the 162 days elapsed gives 1,330.02 euros of accrued but unpaid extra payment.
Other Concepts to Include in the Final Settlement
In addition to the three main components, the final settlement may include other concepts agreed upon by the worker, according to the collective agreement or specific agreements. These may include unpaid overtime, salary supplements, bonuses, extraordinary gratifications, or other variable income such as commissions.
It is also important to check for any severance pay. This is an additional amount that is added to the final settlement when the dismissal is unfair or objective, that is, when the company terminates the contract without just cause or before what was agreed. However, severance pay is calculated separately and is not a regular component of the final settlement in all cases.
Calculation of the Final Gross Amount
Once all the concepts have been calculated, the total sum constitutes the gross amount of the final settlement. In the example we have followed throughout this article, the final settlement would amount to: 450 euros (days worked) + 1,412.50 euros (vacation) + 1,330.02 euros (extra payment) = 3,192.52 euros gross.
However, this is not the money that the worker will ultimately receive. From the gross amount, the employee's contribution to Social Security and the withholding for Personal Income Tax (IRPF) must be deducted. These deductions are applied according to the current tables and may vary depending on the autonomous community and the worker's personal situation.
Important Considerations Before Signing
Before signing the final settlement, it is essential to review all the included concepts and verify that the amounts are correct. If you have doubts, it is advisable to consult a labour advisor or a tax advisor who can analyse your case personally.
A practical tip: if you do not agree with the amount, you have every right to sign the final settlement as "not in agreement" and note the date of receipt. This will allow you time to claim if you believe the amount is incorrect. Remember that you have one year to claim a final settlement from your company or in court if you believe it has not been calculated correctly.
The final settlement is a fundamental right of the worker and must be paid regardless of the reason for the termination of the employment relationship. Whether due to dismissal, voluntary resignation, or natural contract termination, the company is obliged to correctly calculate and pay all corresponding concepts. Knowing how to calculate the final settlement protects you and ensures that you will not leave money on the table when ending your employment relationship.
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