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The impact of parental leave on personnel cost calculations

When calculating the personnel costs in your Horizon Europe project, you may have one of your employees on parental leave. Does this change the personnel cost calculations?

Basic rules to calculate personnel costs

The formula to calculate personnel costs seems quite simple. However, things can get complicated when calculating the right daily rate and the correct number of day-equivalents. This will be crucial if you want to pass audits without getting into trouble.

Personnel cost = daily rate x day-equivalents

To learn more about the basic rules, the article How to calculate personnel costs in Horizon Europe will help you.

Parental leave and day-equivalents

A first step when calculating personnel costs is to check what the maximum number of day-equivalents is. Why should we start with this? Because we need this unit to calculate the daily rate:

Daily rate = Actual personnel costs during the reporting period / Maximum day-equivalents

For a person working full time, the annual maximum day-equivalents will be 215 days. So what is the impact of parental leave on the calculation of the day-equivalents?

The actual time spent on parental leave can be deducted from the maximum declarable day-equivalents.

Parental leave is any leave directly related to the birth or adoption of a child. It is not possible to deduct other kinds of leaves or absences. For example: long-term sick leave, breastfeeding leave, and leave to take care of a sick child cannot be deducted.

Parental leave and daily rate

When calculating the daily rate for the period in which parental leave takes place, you need to declare the actual personnel costs incurred by your company. Therefore, if the parental leave is covered directly by a national scheme you need to exclude these costs.

For example, in a reporting period from 01/07/2022 to 30/06/2023 (12 months), a full-time employee takes four months of parental leave after the birth of a child, that is 72 day-equivalents:

[(215/12) x 4(months on parental leave)] x 1(working time factor as per contract)

The maximum number of declarable day-equivalents for the reporting period will be 143 days (215 days minus 72 day-equivalents of parental leave). You would use this number to calculate the daily rate by dividing the actual personnel cost during the reporting period by 143.

If you need help to calculate your personnel costs properly, you can contact us at hello@getpolite.eu.

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