Severance interest They are a type of savings to which the taxpayer is entitled for annual interest from January 1 to December 31 and that must be paid directly by the employer to the worker, that is, this value must be deposited in the bank account of the worker
(In addition: Layoffs: this is how you can know how much interest comes to you now in January)
This interest corresponds by law to 12% per year of the total value of layoffs or proportional to the time worked in case of not fulfilling one year of work.
The payment dates for this type of savings are legally established, until January 31 of the following year.however, in the event that the employment contract is terminated before the end of the year, the Severance pay interest must be paid proportionally to the time worked.
(Also: Calculate how much you should be paid in interest on your severance pay this year)
It is worth clarifying that «Layoffs are a social benefit to which every worker with a labor relationship is entitled, and corresponds to one month’s salary for each year of service provided,» clarifies Portafolio.
To calculate how much of this savings corresponds to you, you must multiply the accumulated value of layoffs for that year, with the days worked during the year, with 0.12 (equivalent to the 12% already mentioned) and then divide the result of this multiplication of three values by 360.
(Read more about Personal Finance in EL TIEMPO)
An example below; a person who has worked all year and has accumulated annual layoffs of $3,000,000 is entitled to $360,000 in interest on layoffs. The formula would look like this:
C= (3,000,000 * 360 * 0.12)/360
C= 129’600.000/360
C=360,000
