Long service awards are not regulated in the Employment Relationships Act (ZDR-1), but in individual collective agreements that are binding for employers in Slovenia. When are you obliged to pay the a long service award to your employees?
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What is a long service award?
Long service awards are the right of an employee which he can receive on the basis of collective agreement, and also an internal act of the employer or on the basis of an employment contract.
If none of the listed acts regulates the right to the payment of the long service award, the employee cannot claim it.
When can an employee claim a long service award?
The most important thing is to distinguish whether the employee is entitled to a long service award based on the total length of service or the total length of service with the last employer.
Certain collective agreements bind the right to the payment of this benefit to a written proposal submitted by the trade union.
Most collective agreements stipulate that the long service award is paid to the employee upon payment of the salary in the following month, after fulfilling the conditions for receiving the award. The employee’s right to a long service award is also enforceable by lawsuit if the conditions are met. Namely, the statue of limitations is 5 years!
Long service awards by individual business activities
Long service awards under individual collective agreements:
| COLLECTIVE AGREEMENT | 10 years service award | 20 years | 30 years | 40 years |
| Collective agreement for construction activities | 460,00 € | 689,00 € | 919,00 € | 919,00 € |
| Collective agreement for the metal industry * | 535,92 € | 803,88 € | 1.071,84 € | 1.339,80 € |
| Collective agreement for insurances agencies of Slovenia | 362,53 € | 543,79 € | 725,06 € | 725,06 € |
| Collective agreement for the activity of education in the Republic of Slovenia | 50 % of the average monthly salary in the Republic of Slovenia for the last 3 months before payment | long service award adds to 75 % of the average monthly salary in the Republic of Slovenia for the last 3 months before payment | 100 % of the average monthly salary in the Republic of Slovenia for the last 3 months before payment | |
| Collective agreement for textile, clothing, leather and leather-processing activities of Slovenia | 368,00 € | 551,00 € | 735,00 € | 735,00 € |
* The conditions and amounts for long service awards apply to employees who have concluded employment contracts up to and including 31 December 2005.
The tax aspect of the payment
What about the tax aspect of long service awards? The Decree on the Tax Treatment of Reimbursements of Expenses and Other Income from Employment determines individual amounts up to which the amount of the paid award is also not included in the tax base:
- 460 EUR for 10 years of service,
- 689 EUR for 20 years of service,
- 919 EUR for 30 years of service,
- 919 EUR for 40 years of service.
If you have to include it in your income tax declarations, do not miss the deadlines.
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Do you have additional questions regarding long service awards? Do you also plan to start a business in Slovenia? If you also need more details on business in Slovenia, send us an email to data@data.si. You can also call us on +386 1 6006 270/+386 1 6006 274 (our landline). You can also use our Viber/Whatsapp +386 40 530 718/+386 64 173 023. We are also available on skype data.business7.
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