Leave accruals: Examples of how leave is applied based on setup scenarios

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The general setup of leave categories is explained here.

To get a better understanding of how the leave settings work based on their setup, we have provided several examples below:

 

Example 1  

Setup:

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

Result:

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

 

Example 2

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:

Screen_Shot_2018-04-11_at_09.51.01.png 

When an employee takes leave and their balance drops below 20 hours, leave will start accruing again until the balance reaches 20 hours.

N.B. Opening leave balances are taken into account for capping purposes. 

 

Example 3  

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:

Screen_Shot_2018-04-11_at_10.12.19.png

Upon commencement of another leave year, the entire leave balance will carry over and the employee will be allowed to accrue a further maximum 20 hours. The accrual will recommence in the pay run dated AFTER the employee's leave year.

With this setup, regardless of how much leave an employee takes during a leave year, the amount accrued will never exceed 20 hours per leave year.

N.B. Opening leave balances are not taken into account for capping purposes. 

 

Example 4  

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:

Screen_Shot_2018-04-11_at_10.12.19.png

Upon commencement of another leave year, the employee will be allowed to accrue a further maximum 20 hours. The accrual will recommence in the pay run dated AFTER the employee's leave year.

Additionally, upon commencement of a new leave year, only a maximum of 5 hours leave (accrued from the previous year) will be carried over. If an employee's balance is greater than 5 hours the balance will be adjusted in the pay run as follows:

Screen_Shot_2018-04-11_at_10.45.44.png 

With this setup, regardless of how much leave an employee takes during a leave year, the amount accrued will never exceed 20 hours per leave year.

N.B. Opening leave balances are not taken into account for capping purposes. 

 

Example 5:  

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: 

Screen_Shot_2018-04-11_at_11.16.37.png

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.

Result: When 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. 

What date does the system use when calculation the leave date?

The system 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.

What happens when a user creates a new leave category part way through the leave year that is set to accrue in advance?

The first pay run processed subsequent to the leave category being 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.

 

What happens when a user updates an existing leave category part way through the leave year so that it is now set to accrue in advance?

This scenario is not supported. Turning on the "accrue in advance" function 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 system to know when the leave year started for the historic leave accrued. As a result, the system will not correctly calculate the difference between what has already accrued and the further amount that needs to be accrued upfront.

If you have any feedback or questions please contact us via support@yourpayroll.com.au.

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