March 4, 2024

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# How to calculate the amount of end-of-service benefits due at the end of the employment relationship

How is End of Service Gratuity (TFR) calculated? It all depends on the worker’s wage slip and the duration of work.

This is a fairly common question because it concerns all employees: for individuals, TFR applies while TFS (severance pay) applies to public sector employees. First of all, to understand how the calculation is done, we need to clarify what the Total Fertility Rate (TFR) is.

This term is associated with The accumulation of economic value that an employer or company sets aside With the aim of preserving the treasure that will be awarded later when the employee terminates his employment relationship.

The total fertility rate is for all intents and purposes the right of the worker, who They can also be pre-ordered under certain conditions, Which matures over the years. Although it is a completely automatic process for an employee, knowing your TFR means knowing your rights and the amount you have accumulated over the years of work.

## How is the total fertility rate calculated: simple calculation

To calculate the end-of-service gratuity there Specific formulaWhich allows you to understand how much the worker is entitled to receive annually. The process is the same for everyone and includes clear steps.

The total fertility rate is calculated Add the worker’s useful salary for each year of service. This amount must be divided by 13,

In this regard, it is important to know your annual salary to obtain the most accurate calculation possible. a job Practical example, an employee who has worked for 10 years and whose annual salary is 30,000 euros will have to do the following calculation: 30,000 / 13.5 = 2,222.22 euros. In this regard, it will be necessary to multiply the amount by 10 years, thus 2222.22 x 10 = 22222.22 euros.

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Although this is the correct method, it deserves clarification: The calculation takes into account salary changes that occurred during the years of service. But also bonuses, bonuses and other additional rewards can affect the TFR calculation. In this regard, it is the employer’s responsibility to carry out this calculation correctly, and always inform the employee of the accumulated amount.

Finally, it’s good to know The employer has specific responsibilities in managing the TFR, How to keep fees aside monthly, as well as record the amount in the company’s financial documents. Finally, it is the employer’s duty to inform the employee of the amount of accumulated end-of-service benefits each year.