We would like to inform you that in the latest edition of the explanations, Financial Administration of RS has published the following novelty regarding the return of recourse and termination of employment
If the employee receives the full amount of holiday pay by 1st of July, which is fully tax-free because it does not exceed the statutory amount of tax-free holiday pay, after which his employment with the employer is terminated. Upon termination of employment, the employer may demand from the employee the return of a proportionate part of the holiday pay, which is then returned by the employee, or the employee does not agree with the return. The employer may also decide not to demand the return of a proportionate part of the holiday pay from the employee.
How does the employer treat the payment for tax purposes differently from the recourse and correct the REK form, if the employee does not return the proportional part of the recourse?
The tax base and the base for the payment of social security contributions do not include holiday pay, which is determined as a right from employment in accordance with the law, or substantially comparable income from abroad, up to 100% of the average monthly salary of employees in Slovenia. For the substantive definition of an individual income from Recourse for employee under labour law as income according to point 13 of the first paragraph of Article 44 of the Personal Income Tax Act (ZDoh-2) and according to the third paragraph of Article 144 of the Pension and Disability Insurance Act - ZPIZ-2.
Neither in ZDoh-2 nor in ZPIZ-2 do not establish a basis for the maximum amount for tax-free or non-contributory holiday pay, which is determined as 100% of the average monthly salary of employees in Slovenia. The same goes for annual personal income tax calculation for 100% the average annual salary of employees in Slovenia, calculated per month for the year for which personal income tax is assessed. As a proportionate part is taken into account the employee is not entitled to a full holiday pay under labour law. It is also necessary to take into account the fact that at the time of payment of the holiday pay the conditions for its payment were met and the employer could not foresee that the employee's employment with this employer would terminate subsequently after the payment of holiday pay. Furthermore, in the event of termination of employment, if the employee does not return the proportional part of the holiday pay, the employer does not have to correct the REK form.