Payroll with temporary incapacity: finally a simple calculation with examples!

Whether you are an employer or self-employed, it's time to calculate your payroll and it takes you longer to open the computer than to realise all the incidents that took place during the month.

You break out in a cold sweat and psychologically prepare yourself to spend the day going over applicable amounts, basic salaries and legal provisions.

Been there, done that! That's why today, Appvizer shares its knowledge on the subject with you and offers you punctual examples of payroll with temporary incapacity (TI).

👼🏼 (Celestial music plays in the background).

See all software Payroll

Payroll with temporary incapacity (TI)

Let's start by clarifying which situation gives rise to a temporary incapacity benefit.

There are situations in the company that give rise to what is known as sick leave. This is a period of time during which the worker is unable to carry out his/her normal duties and requires medical care from the Social Security (INSS).

Such sick leave may be due to different reasons or, as it is officially known, to different types of contingencies:

• Common contingencies: this corresponds to the case of common illness or non-occupational accident.
• Occupational contingencies: corresponds to the case of occupational illness or accident at work.

Whatever the type of contingency that gave rise to the sick leave, the worker is entitled to receive a benefit, even if it is not the same as the one he/she normally receives.

The amounts, requirements and responsibilities in each case are defined by law and are summarised in the following table:

* As ageneral rule, the regulatory base is obtained by dividing:

The amount of the worker's contribution base in the month prior to the month in which the incapacity begins, by the number of days to which this contribution refers. (For example, if we are talking about monthly salary, this divisor will be equal to 30. If we are talking about daily salary, we will take into account, for example, that for the case of the month of February, the divisor will be 28).

💡 The following formula is used to calculate the regulatory base for temporary incapacity due to an accident at work or occupational disease:

How do you make a payroll with sick leave? → Exercise solved

Let's move from theory to practice with the following example of a payroll with a sick leave situation.

Steps to calculate the amount due to sick leave

1. Define the regulatory basis for calculating the amounts.
2. Take into account the payments that apply for seniority, activity, transport, etc.
3. Calculate the values corresponding to the salary to be received, according to the table of amounts and the percentages that correspond in each case, multiplying the regulatory base by the values obtained in the previous step.
4. Obtain the total benefit, adding the values corresponding to each range of days that have just been calculated.

Let's see it more clearly with a practical example.

Example of temporary incapacity due to common illness

Alicia, a web developer for company X, receives a basic salary equivalent to 1,800 euros. In January, Alicia is on sick leave for 21 days due to a common contingency. What is the salary that Alicia will receive at the end of the month?

1. Definition of the regulatory base

Assuming that Alice's contribution base is 1 750 euros, we have the following:

BR = [1 750 EUR / 30 days] = 58.33 EUR/day

2. Consider the perceptions that apply, as the case may be. As mentioned above, this refers to additional values for:

• Seniority,
• activity,
• agreement bonuses
• transport,
• pro-rata overtime (overtime applies to days worked).

3. Calculation of the values to be charged, according to the number of days worked.

Taking into account that:

• Days worked: 1 to 10 January = 10 days worked.
• Days on sick leave: 11 to 31 May = 21 days.

We have the following values, according to the number of days of sick leave and the percentages established by law:

• From 1 to 10 January, Alicia receives the usual value she receives when she is not on sick leave, i.e.:

58,33 * 10 = 583,30€

• From 11 to 13 January, Alicia receives nothing as it is the first three days of sick leave.
• For the following 12 days, i.e. from 14 to 26 January, Alicia is paid 60% of the regulatory base, i.e:

58,33 * 0,60 *12 = 419,97€

• For the following 5 days, i.e. from 27 to 31 January, Alicia also receives 60% of the regulatory base. This time, however, the INSS will be responsible for the payment:

58,33 * 0,60 *5 = 174,99€

4. Obtain the total benefit

583,30 + 419,97 + 174,99 = 1 178,26€

In total, for the month of January, Alicia will receive €1 178.26 instead of the €1 750 that she would have received in a month without sick leave.

See all software Payroll

To sum up...

• A company's payroll is not invariable. On the contrary, it can vary from month to month, among other things, due to temporary incapacity (TI): illness or accident (whether or not due to work).
• The amounts corresponding to the type of contingency that gave rise to the sick leave (common or professional) are defined by law.
• Likewise, the type of contingency and the number of days of sick leave determine the distribution of the payment:
  • Contributions for the company,
  • Social Security contributions.
• When calculating a TI payroll, the following elements must be taken into account:
  • The regulatory basis,
  • the number of days of sick leave,
  • the applicable percentages to be paid in each case.