This screen allows you to set up your leave categories and control which of them accrue automatically, how they will behave in the pay run, whether or not to include them in termination payments, and decide which should appear in your employee's pay slips.
The settings for leave categories can be accessed and updated by clicking on the 'Payroll settings' > 'Leave Categories' link on the payroll dashboard.
- Any changes that are made to your business's leave category settings will not be applied to existing employees. The new settings will only apply 'automatically' to any new employees who are subsequently added to your payroll.
- If a leave allowance template is not assigned to an employee, the leave category settings will apply automatically to those employees, and the accrual rates for all leave categories will be nil.
- If you want to change the leave settings for employees you will need to do this on an individual basis. To do this, go to the employee file and access the Leave Allowances screen.
- You can change employee leave settings in bulk by using a leave allowance template, then apply that template to each employee's record - this is all explained here...Leave Allowance Templates.
Default leave categories explained
The following default leave categories will appear in your business:
- Annual leave;
- Hospitalisation leave;
- Leave without pay;
- Maternity leave;
- Sick leave
NB: If your employee has been attached to a leave allowance template, the system will calculate the correct accrual rates based on the employees length of service.
Navigating the leave category functions
The first setting you will notice on this screen relates to setting the leave year start date. This will allow you to configure a start date in bulk for any leave categories that accrue based on a leave year (as opposed to on an ongoing basis). By default, the leave year start date is the employee's start date, however you can change this so that it starts on a specific date:
If the leave year start date will be a specific date (ie not the employee's start date) but different for each employee then do not configure from this screen. Rather, you can set this up at the employee level from each employee's Leave Allowances screen.
The next setting is the Leave anniversary option. This setting relates to tiered leave allowance templates and triggers the tiers to change in the employees Leave Allowances page, essentially defining when the leave allowances should 'reset'. The options available are employees start date, calendar year or you can select a specific date. This applies to leave categories that accrue automatically and will take affect from the second year onwards.
You can also enforce that any leave request submitted (be it by the employee or the manager, on behalf of the employee) includes notes about the leave. This setting is configured by ticking the "Require notes when submitting leave requests" checkbox.
Add a new leave category
You can choose to add more categories by clicking on the 'Add' button to the right of the screen. You will then need to enter the following information:
- Name: The name of the leave category. A value is required in this field. Make sure it is self explanatory as the name will be made visible to employees and all users throughout the platform.
- External Id: This is only required if you are using an external system to capture leave requests or timesheet entries and hence need to map the code used from such external system. If an external id is used that has been used before you won't be able to save it if the 'unique external Id' setting is switched on. This setting is located on the Payroll settings > Advanced settings page. See here for more information.
- Employee Leave Balance: There is a drop down box to choose from 'Tracked' or 'Not tracked'. For some types of leave that aren't accrued in the usual way (e.g. leave without pay) it might not make sense for an employee to have a 'balance'. In these cases you should set this value to 'Not tracked' to tell the system it doesn't need to keep track of how much of this type of leave an employee is entitled to.
Automatically accrues: Select this option if the leave is to accrue automatically. You will then be required to choose whether the leave will accrue on an ongoing basis or accrue based on a defined leave year. The leave year can be set as the employee's start date or another specific date.
- Leave entitlement to start after? This option appears if you have specified that the leave category will accrue based on the employee's leave year. If you don't want the leave to start accruing immediately but rather after a certain period of time, you can configure that using this field. For eg, if a leave category is meant to start accruing on the 4th month of the leave year, enter 3 in this field. This also means that the leave will reset on that month every leave year. For example, the leave year start date is set as the employee's start date (1/1/2020). A specific leave category's leave entitlement will start accruing after 3 months, which means it will start accruing on 1/4/2020. The next leave year start date for this leave category will then be 1/4/2021 for this employee.
- Exclude from termination pay out: Select this option if you do not want any of the unused leave balance for this leave category to automatically be paid out upon termination.
- Hide accruals from pay slips: Select this option if you do not wish to allow employees to see the amount of leave accrued for this leave category within a pay run on their pay slips.
- Hide balances from pay slips and in employee portal: Select this option if you do not wish to allow employees to see the balance of this leave category on their pay slips or in the employee portal.
- Hide leave category name from employee view: Select this option if you do not wish to have the leave category name displayed in the calendar contained within the employee's portal. All that will be displayed is the employee name and the period of leave taken. This setting works in conjunction with the setting 'Employees can view approved leave' from the Employee Portal Settings screen.
The following image is an example of how approved leave is displayed in the employee portal depending on whether the leave category name is displayed or hidden:
The following image will only be displayed where leave is set to accrue automatically on an ongoing basis:
N.B the 'Limit leave accruals to the first pay run for the period' will only display if the allowance is set to Standard Weeks per year or Standard Days per year.
Standard allowance: This setting appears where the leave category is configured to accrue automatically. Enter the entitlement and then select, from the dropdown list, the unit type and accrual method. You can also click on the calculator icon to assist with calculating the entitlement and ensuring the correct figure is being applied, for example:
If choosing the hours per pay run accrual method, please note that the leave will accrue in every pay run, regardless of whether the employee is paid or not in that pay run. If choosing the hours per hour worked accrual method, please note that leave will only accrue against pay categories that have the "Accrues Leave" checkbox ticked.
- Accrue in advance: This setting will appear if leave is configured to accrue automatically based on the employee's leave year. Select this option if you want employees to accrue their whole entitlement in advance. This means that the full annual entitlement will be accrued in the employee's first pay run and will then be added to their leave balance.
- Limit leave accruals in the first pay run for the period: Enabling this option will allow the leave type to accrue in the first pay run for the pay period, and cap the leave for any other pay runs with the exact same pay period start and end date. This applies to ordinary pay runs and ad hoc pay runs.
- Leave accrual capping: This setting allows you to select whether or not the number of hours accrued will be capped. If the accrual is to be capped, select 'limited to' from the drop down list and then enter the maximum number of hours that should accrue. The rules and examples around leave capping are explained in further detail here.
- Carrying over the balance: This setting will appear if leave is configured to accrue automatically based on the employee's leave year and you have capped the accrual of leave for the leave year. This setting allows you to cap the number of leave units to carry over to the next leave year. If the entire leave balance is to be carried over, keep the default setting 'the entire balance'. If only a portion of the leave balance is to be carried over, select 'a maximum of' from the drop down list and then enter the maximum number of units to be carried over.
Unit type: This setting will display if the leave category is (a) not tracked or (b) tracked but does not accrue automatically. This setting is required so that the system knows whether to display the leave in days, weeks or hours. The display is relevant for when an employee applies for leave. When a leave category is displayed in either days or weeks, the leave will then be converted into hours in the pay run and a conversion formula will be made available to see how the conversion was calculated. This does not occur where the leave category payment setup = basic, as explained further below.
Payment Setup: This section determines whether the employee is paid for the leave taken and the pay category that is assigned when leave is taken.
Basic: When an employee does not use timesheets or uses timesheets for exceptions only, the employee's leave balance will be reduced but default pay run earnings will not be impacted. When an employee is using timesheets to submit all time worked, an earnings line will be created and the leave balance will be reduced. To check or assign the employee's timesheet setting, go to the employee's Pay Run Defaults page. The timesheets option
is near the top of the page.
- Don't pay for the leave taken: When an employee does not use timesheets, an earnings line with negative hours will be added to reduce the earnings for the employee. When an employee is using timesheets to submit all time worked, two earnings lines will be created (one positive, one negative) that will cancel each other out.
Report the earnings for the leave taken against another pay category: When wanting to report payments for leave taken using a separate pay category (for reporting/journaling purposes), select this option. The earnings related to the leave taken will be assigned against the specified pay category instead of the employee's primary pay category. When this alternative is selected, the option will be given to use the rate of pay from the employee's primary pay category.
- Custom: For advanced users only, this option allows the user to deduct hours from an arbitrary pay category and transfer them to another arbitrary pay category when leave is taken.
Editing an Existing Leave Category
To edit the settings of an existing leave category, simply click on the name of the leave category to expand the settings. Make the relevant changes and then click on "Save".
Any changes made to leave category settings will not be applied to existing employees. Updated settings will only apply automatically to any new employees who are subsequently added to your payroll. If you want to change the leave settings for your existing employees you will also need to make the same adjustments on each employee's Leave Allowances page. You can manage this better by using leave allowance templates, which is all explained here.
Restoring a deleted leave category
You are able to restore a leave category by going to Payroll settings > Restore deleted items, and selecting 'leave category' from the drop down box. A list of all deleted leave categories will appear and you can click the 'Restore' option against the leave category that you are wanting to reinstate.
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