In case you are a regular employee in Czech Republic, you usually get 20-25 paid vacation days per year. The salary compensation for these days is not the same as the salary you’d get, if you were to work instead. The payroll department will calculate the compensation from the average earnings in the previous calendar quarter, preceding the month in which you took your paid days off. So, for example, when you take holidays in August, your salary compensation calculation takes into account your average earnings from April to June. Therefore, if you happen to receive a bonus in one of those months, the compensation calculation in July, August or September will include it. So, planning your holidays strategically can significantly increase the amount of money you receive during your holidays.
Which quarter is considered when you take paid vacation days?
There are four quarters in each calendar year: January to March, April to June, July to September, and October to December. So always keep in this in mind. What your salary compensation for holidays takes into account is the earnings in the preceding quarter. It’s not necessarily the three months before your vacation period.
If you want to calculate your average earnings, simply divide the gross salary for a given calendar quarter by the number of hours you worked. Here is the great thing about this, you should include your bonuses in the gross salary as well. So, taking time off after a quarter in which you received a bonus pays off. It means your salary compensation is going to be higher than your salary could be.
In case there was a one-off kind of a bonus that you received, it goes into the calculation in its entirety. However, bonuses that are tied to your performance over a certain period of time only impact the monthly average proportionately. For example, take your annual bonus. Here, 1/4 of its total amount goes into the average earnings calculation in each quarter.
What else to consider?
Keep in mind that the number of hours worked in each quarter also goes into the calculation. The less you worked, the higher your quarter’s average is. So, for example, February typically has less working hours than any other month. Therefore, the average for the first quarter would typically be a bit higher in comparison to other quarters. That, of course, assuming your salary is otherwise the same throughout the year.
Also, don’t celebrate your promotion by taking days off and traveling! If you got a promotion recently and started enjoying your higher salary, wait a bit. Plan your holidays for when a full calendar quarter of such higher earnings passes. Otherwise, your previous (lower) salary will impact your salary compensation for holidays.
So, be smart about selecting your paid vacation days, and make the maximum out of each bonus or promotion. And when planning your holidays, don’t forget that we offer 10% cashback on your Booking.com reservations and more. 😉 And make sure you book your tickets and accommodation using any currency on your FREE Revolut card you can get with us. I was recently looking for a way to spend my remaining paid vacation days for this year and I booked an AirBnb for an equivalent of 9000 CZK. Guess what! I saved 700 CZK on exchange rate with Revolut, in comparison to my regular Czech bank card, because AirBnb charges in US dollars. Make smart money moves with PragueReferral.cz. 😉