Some employees may be paid holiday pay at the rate of 8% of their gross earnings with their regular pay instead of being provided with 4 weeks’ annual holidays each year. This option is called Pay as you go (8%).
This can only be done if:
- the employee is employed on a genuine fixed-term agreement of less than 12 months, or
- the employee works so intermittently or irregularly that it is impractical for the employer to provide them with 4 weeks’ annual holidays, and
- the employee must also agree to it in their employment agreement.
Below are the instructions on how to apply Pay as you go (8%) automatically in each pay run for the employee.
If a new employee and via the add employee wizard, within step 3 - Employment Details, tick on the 'Irregular Employment?' checkbox and apply the 'Irregular Employment' leave allowance template.
For an employee already set up in the system, go to the employee's profile > Pay Run Defaults page, at the bottom of the page, tick on the 'Irregular employment?' checkbox, then click on 'Save'.
Then from the employee's profile > Leave Allowances page, select the 'Irregular Employment' template from the leave allowances template drop down and click on 'Save'.
The above settings will ensure that the standard leave category default settings of Annual holidays of 4 weeks, Sick Leave of 5 days and Domestic Violence leave of 10 days are not applied for the employee.
Instead, the "Pay as you go (8%)" will automatically apply. "Pay as you go (8%)" pay rate will automatically kick in when the 'Irregular Employment' checkbox and 'Irregular Employment' leave allowance template is set for the employee.
Then in the pay run, the employee's pay as you go (8%) will be automatically included as an earnings line and will calculate the 8% of the employee's gross pay.
If you click on the 'i' icon next to the Pay as you go (8%) 'Rate' input field, it will provide the calculation details under 'Holiday Pay 8%'. You may add additional notes if you wish, which will appear in the pay slip (if you have the pay slip notes ticked within the pay slip settings).
Check to ensure the pay run is correct and if so, then finalise pay run.
The Pay as you go (8%) will display as a separate line item in the employee's pay slip. An example of this is shown below:
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