How does the billing of vacation and sick days work?
August 12, 2022 | 40,00 EUR | answered by Günther Tiefental
Dear tax consultant,
My name is Karl Gruhlke and I work as the managing director of a medium-sized company. In our company, we often have difficulties with the accounting of our employees' vacation and sick days. Unfortunately, I lack the necessary expertise to properly understand and calculate these issues.
Currently, we are using a traditional accounting system that does not provide sufficient support. We have problems with recording vacation days as employees often do not correctly enter or forget to request their vacation days. Accounting for sick days also presents challenges for us as we are unsure of how to calculate them correctly and if we, as employers, need to adhere to certain deadlines.
These uncertainties and problems lead to dissatisfaction among employees and unnecessary delays in payroll processing. Therefore, I am looking for a solution to improve and simplify the accounting of vacation and sick days in our company.
Could you please explain to me how the accounting of vacation and sick days works and what legal requirements we as employers need to consider? Are there modern accounting systems that can assist us with recording and calculating? I look forward to your helpful tips and suggestions.
Thank you in advance.
Best regards,
Karl Gruhlke
Dear Mr. Gruhlke,
Thank you for your inquiry and your interest in improving the billing of vacation and sick days in your company. It is understandable that these topics can be a challenge for many companies. I am happy to explain to you how the billing of vacation and sick days works and what legal requirements you as an employer must observe.
The billing of vacation days is usually based on the Federal Vacation Act (BUrlG). According to this, employees have a legal right to paid annual leave. The number of vacation days depends on the number of working days per week. Usually, the statutory minimum vacation is 24 working days per year for a five-day week. However, the vacation entitlement can also exceed this, depending on the collective agreement or individual agreement.
It is important to accurately record and document the employees' vacation days. For this, I recommend using a modern billing system that automatically calculates and manages the vacation days. Employees should be able to apply for their vacation days online to ensure transparent and efficient vacation planning.
The billing of sick days is also based on legal requirements, in particular the Continued Payment of Remuneration Act (EFZG). According to this, employees are entitled to continued payment of remuneration for a certain period in case of illness. The exact amount and duration of the continued payment of remuneration are legally regulated and depend, among other things, on the length of service with the company.
Here too, accurate recording of sick days is crucial. Modern billing systems can help you document the sick days and calculate the continued payment of remuneration correctly. Additionally, as an employer, you should adhere to certain deadlines, such as promptly reporting sick days to the health insurance.
Overall, it is important that as an employer, you have an efficient billing system that supports you in recording and calculating vacation and sick days. Modern software solutions offer numerous functions to simplify and optimize these processes.
Therefore, I recommend that you get in touch with an expert in payroll and billing systems to find a tailored solution for your company. I am happy to answer any further questions and support you in optimizing your payroll.
Kind regards,
Günther Tiefental, Tax Consultant.
