Starting September 1, 2025, the Government of the Russian Federation Resolution No. 540 of April 24, 2025 “On Specifics of Calculating Average Wages” will enter into force. It will replace Resolution No. 922, which has been in effect since 2007, and render it invalid.

Although the new regulation has generated much discussion, the procedure for calculating vacation pay essentially remains unchanged. The main adjustments concern the inclusion of incentive payments and the calculation of severance pay.

Key Changes

1. New types of payments included.
   Accounting must now consider monetary incentives. Previously, only monthly bonuses were included, but from September, quarterly and annual bonuses, as well as salary increases, must also be taken into account.
2. New rules for aggregated working time.
   In cases of summarized (aggregated) working time, benefits will now be calculated based on average hourly earnings rather than daily earnings.
3. Changes in severance pay calculations.
   The rules for vacation pay remain unchanged. Adjustments apply only to the requirement to include incentive payments, though the regulation does not specify what exactly falls under this definition. Likely candidates are bonuses, seniority increments, and overtime pay. However, only payments not classified as social benefits may be included.
4. Excluded from total income:
   

   sick leave payments, including maternity leave;

   

   compensation during study leave;

   

   vacation pay itself;

   

   idle time payments (except when caused by the employee’s fault);

   

   days off for caring for a disabled child under 18;

   

   social benefits, e.g., travel, meals, or accommodation costs.

If severance pay is to be calculated, the new regulation introduces a key change—this was, in fact, the reason a new resolution had to be issued. The Constitutional Court required abandoning the approach where the amount of severance pay depended on the number of working days in the month of dismissal. Therefore, starting September 1, 2025, daily earnings will be multiplied by the average number of working days in the current year.

Practical Recommendations

Local acts and collective agreements. Internal documents must be updated to align with the new resolution.

Payroll systems. Check formulas in payroll software and make necessary adjustments.

Employee communication. Inform staff about the changes to avoid misunderstandings when calculating payments.

Conclusion

From September 1, 2025, employers will face targeted changes in the calculation of average earnings. Vacation pay will still be calculated under the existing rules, but severance payments and certain incentive payments must be handled under the updated procedure.

These new rules are not a “major reform” but rather a fine-tuning that requires attention to detail and adaptation of internal processes.

Sources: Government Resolution of the Russian Federation No. 540 of April 24, 2025; MTS Redspot article.