This application component includes all the activities related to the administration, calculation and payment of employee severance payments.

Severance payments are benefits the employee receives for notice, seniority and other factors. In Venezuelan payroll accounting, seniority is periodically run and paid, along with other severance payments, at the end of the employee’s work contract with the company in accordance with current legislation on work termination reasons. If the employee so requests, you can pay him/her the annual seniority days and the interest generated on the total seniority amount annually.

Seniority is an amount the employee receives for the time worked in the company. The capital generated by cumulated seniority bears interest that must be calculated and credited to the employee according to the following:

• If this capital remains within the company accounting system at the employee’s request, the interest earned is paid according to the average deposit and lending rates set by the Central Bank of Venezuela (BCV) in reference to the six main banking companies in the country.

• If this capital remains within the company accounting system in spite of the employee’s request to transfer it to an external banking company, the interest earned is paid according to the average lending rate set by the Central Bank of Venezuela (BCV) in reference to the six main banking companies of the country.
• If the capital is deposited with an external banking company, the earned interest is paid according to the interest rate offered by that company.