Setup:

• Leave accrual type: Automatically accrues on an ongoing basis
• Cap: Accruals for leave category are not limited

Result:

Employee will start accruing leave as per the accrual rate. Leave will continue to accrue on an ongoing basis until the termination of the employee's employment. 

Setup:

• Leave accrual type: Automatically accrues on an ongoing basis  
• Cap: Accruals for leave category limited to a maximum 20 hours 

Result:

When an employee’s total leave balance reaches 20 hours, then leave will no longer continue to accrue. A message will appear in the pay-run advising as such. When an employee takes leave and their balance drops below 20 hours, leave will not start accruing again until the commencement of a new leave year (see Part 2 below for details). Opening leave balances and leave adjustments are not included for capping purposes.

Setup:

• Leave accrual type: Automatically accrues based on the employee's leave year
• Cap: Accruals for leave category limited to a maximum 20 hours 
• Carry Over: Entire balance

Result:

When an employee’s total leave balance reaches 20 hours for the leave year, then leave will no longer continue to accrue. A message will appear in the pay-run advising as such, Upon commencement of another leave year, the entire leave balance will carry over and the employee will be allowed to accrue a further maximum of 20 hours. Refer to Part 2 below for more information around the cap resetting.

Setup:

• Leave accrual type: Automatically accrues based on the employee's leave year
• Cap: Accruals for leave category limited to a maximum 20 hours 
• Carry Over: Maximum of 5 hours

Result:

When an employee’s total leave balance reaches 20 hours for the leave year, then leave will no longer continue to accrue. A message will appear in the pay run advising as such. Upon commencement of another leave year, the employee will be allowed to accrue a further maximum of 20 hours. Refer to Part 2 below for more information around the cap resetting.

Additionally, upon commencement of a new leave year, only a maximum of five hours of leave (accrued from the previous year) will be carried over. If an employee's balance is greater than five hours, the balance will be adjusted in the pay run.

Setup:

• Leave accrual type: Automatically accrues based on the employee's leave year
• Accrue in advance: Yes
• Cap: Accruals for leave category limited to a maximum 152 hours 
• Carry Over: Entire balance

Result:

When employee's commencement date = the leave year date The total amount of leave owed to the employee within the leave year will be paid upfront in the employee's first pay run. The following message will be shown in the pay run to indicate as such: The employee will then no longer continue to accrue leave during the leave year. Upon commencement of the next leave year, the entire leave entitlement will again be added to the employee's balance in the pay run dated after the employee's leave year start date (unless the employee’s leave year start date = pay run start date or previous pay run end date, in this case the leave accrual will recommence in the same pay run as the employee’s leave year start date).

When an employee's commencement date is after the leave year date The difference here is that the employee will receive an upfront pro-rata amount of the annual entitlement in the first year. This is because the employee has only worked a portion of the leave year. From the second leave year and thereafter, the employee will receive the full upfront leave amount.

The platform looks at where the Leave Year Start Date (LYSD) falls and whether the employee hit their Annual Cap in the prior leave year.

• The "Bridge" Period: If the LYSD falls mid/end period, that pay run is treated as the final unit of the old year. If the employee has already reached their annual cap, they won’t receive an accrual for this "bridge" run.

• Predictable Resets: By waiting for the first full pay run following the anniversary, the reset always stays aligned with the calendar. This prevents the reset from drifting into earlier pay periods in subsequent years.

• Negative Balances: If an employee has a negative balance at the time of reset, the liability is carried forward into the new leave year to ensure the debt is maintained while the new year's accrual counter starts fresh.

The platform will use the employee’s start date. This can be found on the Employee File -> Details page. You can however, override this at an employee level via the employee’s Leave Allowances screen. The anniversary date (set within the employee’s Details screen) has no impact on the employee’s leave year date.

The first pay run processed after the leave category is created will accrue an upfront pro-rata amount of the leave entitlement. Leave will then no longer accrue for this leave type until a pay run is processed for the pay period after the next leave year.

This scenario is not supported. Turning on the Accrue in Advance feature for an existing leave category is not supported. The reason is you are changing an existing leave category from accruing on an ongoing basis to accruing based on a leave year. As the employee has already accrued leave historically, there is no way for the platform to know when the leave year started for the historic leave accrued. As a result, the platform will not correctly calculate the difference between what has already accrued and the further amount that needs to be accrued upfront.

The leave adjustment will be added to each employee's to reverse out the (old year's) balance when the new (leave) year's balance is accrued - this will happen in the first full pay period after the employee's anniversary date each year (refer to Part 2 above for more information around the cap resetting).

The settings you put in place for this leave category determine how/if this adjustment will show up on the pay slip so:

• If the leave category settings are set to hide the accruals and balances, the leave adjustment we add to clear out /add new leave will not be displayed on the pay slip (at all)

• If the leave category settings are not set to hide the accruals and balances, the pay slip for the pay run where we add the leave adjustment to clear out the (old) leave balance and the add (new) leave accrual will display (in the Leave Details section on the pay slip) as:

  • Leave Accrued: 38 hours (e.g.)
  • Leave Taken: 38 hours (e.g.)
  • Balance: 38 hours (e.g.)

  Therefore, if you do not want to see the adjustment leave show up on the pay slip, unless the employee‌ takes this type of leave, you just need to adjust the leave category settings to hide accruals and balances. You will find the leave category settings under the Pay Run Settings heading on the payroll settings tab on the payroll dashboard. Click on the Leave category to expand the settings and tick the boxes to Hide accruals and balances.

The way the 'accrue in advance' leave calculation works is that it looks at three things:

1. The amount of hours of leave that needs to be accrued.
2. The period of time that it needs to accrue over - i.e. a year.
3. The pay period schedule (weekly, fortnightly, monthly) that the accrual will appear in.

So, for example, if you are wanting your employees to accrue 76 hours (2 weeks) per year of a particular leave category in a weekly pay run, the leave calculation is 76 (hours) / 52 (weeks) = 1.4615 hours per week. And since the leave is set to accrue in advance, you would expect the full 76 hours to accrue for employees getting paid 38 hours in the weekly pay run. 

However, the leave does accrue in advance using the above calculations except for the first week, i.e. the pay run that the accrual appears in. What this means is that if an employee does not work the full 38 hours, or if the pay categories used to pay the employee are not set to accrue leave, the platform will pro-rata the accrual based on the actual hours paid against pay categories that are set to accrue leave.

For example, if in the pay run the employee only worked 35.5 hours of pay categories that accrue leave, the calculation would be 35.5 (hours) / 38 * 1.4615 = 1.3653. The rest of the calculation would be 1.3653 (hours) + (51 (remaining weeks) * 1.4615 (the 'standard' weekly accrual) = 75.90385 hours. If this happens, the easiest solution is to edit the leave accrual by clicking the pencil icon within the pay run and entering the desired total accrual amount.