Lump-Sum Payment of Accrued Vacation and Sick Time for Deceased Employees
Example: Calculating the Lump-Sum Payment

Example: Calculating the Lump-Sum Payment

• Death Date: 03/09/2022 (worked six days and one holiday in March)
• Base Salary: $4,050/month
• Annual Leave Balance: 215 hours
• Sick Leave Balance: 80 hours
• Total Standard Working Days in March: 23
• Total Working Hours in March: 184
• March Holidays in Calculation: 1 (03/02/2022)
• Total Standard Working Days in April: 22
• Total Hours in April: 176 hours
• April Holidays in Calculation: 1 (04/21/2022)
  1. Calculate vacation hours and applicable hourly rate for each month
     • March: $4,050/184 = $22.01087/per hour
     • April: $4,050/176 = $23.01136/per hour
  2. Calculate the lump-sum gross of vacation leave for each month
     • March: $22.01087 x 128 (16 days in March following death = 16 days x 8 hrs = 128 hrs) = $2,817.39
     • April: $23.01136 x 87 (annual leave balance minus hours in March = 215 -128 = 87) = $2,001.99
  3. Add March and April gross totals for total vacation leave
     • $2,817.39 (March) + $2,001.99 (April) = $4,819.38
  4. Calculate lump-sum gross of sick leave
     • 80 sick leave hours/2 = 40 sick leave hours

       Note: Sick leave is taken after all vacation leave is exhausted and the hourly rate will be for the month the sick leave will occur.

     • April: 40 sick leave hours x $23.01136 = $920.45
  5. Calculate the holiday hours with the April sick leave
     • April: Eight holiday hours x $23.01136 = $184.09
     • April: $184.09 + $920.45 = $1,104.55 Total Sick
  6. Calculate the lump-sum gross payment
     • $4,819.38 (vacation) + $1,104.55 (sick) = $5,923.93 Total Gross

Sources

Texas Estates Code Section 453.004; 34 Texas Administrative Code Section 5.44; Texas Government Code, Section 661.031-.038; IRS Publication 15 (Circular E) PDF, Employee’s Tax Guide; IRS Publication 15-A PDF, Employer’s Supplemental Tax Guide.