Leave and Leave Loading

In Kwik-Pay all leave accrued and taken is calculated by adding pay items to each employee's pay. If you wish to accrue leave on a pay period by pay period basis, you will need to add an 'accrue leave' pay item to each employee's pay calculation screen. If an employee does not have an accrue leave pay item, their yearly entitlement to leave will be added to their leave balance on the anniversary of their start date.

Several pay items have been pre-defined to accrue an employee's entitlement to annual leave and pay that leave when it is taken.

For more information on setting up leave processing see How to set up leave processing.

Accrue Annual Leave

The 'Accrue annual leave' pay item will calculate one pay period's proportion of their annual leave entitlement and add that to their annual leave balance. The proportion is calculated by dividing the employee's annual leave entitlement by the number of pay periods per year shown on the pay group set up screen, or as a percentage of the number of hours worked, depending on the employee's leave accrual basis as selected in the employee details, leave details tab for the leave type.

Leave entitlements are derived from the award leave entitlements if no leave entitlement has been entered for the employee in the payee leave details screen. If the leave accrual basis is a percentage, the percentage rate will be calculated as the percentage of the yearly entitlement divided by the employees hours per year, where the hours per year is calculated as the employee's hours per week multiplied by 52, or 2080 if the employee hours per week has not been set.

Take Annual Leave

Annual leave taken is added to the pay calculation screen. When a pay item has been set up with a leave type, Kwik-Pay will prompt for a start and end date for the leave spell, and will calculate a number of units to pay (either hours or days depending on the pay item basis), and will calculate the cash according to the rules defined below. If you have permanent part-time employees who work set hours on different days of the week, you can define the number hours for each day in the Employee Leave Details form.

Calculate holiday pay (All except NZ)

If the employee is hourly paid, not paid a salary, the 'Annual leave taken' pay item can be used to pay annual leave taken. It will simply calculate the cash from the number of units (hours) entered and the employee's hourly rate. The number of units will be added to the total of annual leave taken for the oldest leave year that has a remaining leave balance.

If the 'Annual leave taken' pay item has it's calculation type changed to 'HolPay' in the Pay Item Edit form, the leave will be calculated according to the employee's leave basis, set in the Payee Leave form:

Ordinary rate pays the annual leave at the employee's hourly rate 1
Salary no cash amount is calculated for the leave, only the units decrease the annual leave balance. It is assumed that the employee receives a salary payment that will not vary when the employee is on leave.

Calculate holiday pay (New Zealand)

The amount of cash paid depends on the leave basis assigned to the employee in the payee, leave details form for annual leave:

Ordinary rate pays the annual leave at the employee's hourly rate 1
Average Hourly Rate calculates an hourly rate based on the earnings in the leave year in which the leave being taken was accrued, but if that rate is less than the employee's current hourly rate 1, the current hourly rate 1 is used instead. For pay dates on or after 1 April 2004, the calculation is changed to conform with the Holidays Act 2003: the earnings for the 12 months prior to the current pay date is divided by the number of hours worked in that period to give the average hourly rate at which the leave is paid.
Salary no cash amount is calculated for the leave, only the units decrease the annual leave balance. It is assumed that the employee receives a salary payment that will not vary when the employee is on leave.
Percentage of Earnings calculates a total amount to pay by multiplying the earnings to date by the leave percentage rate (from the payee, leave details screen yearly entitlement field) and then subtracting the total of holiday paid to date. The employee always receives the total outstanding holiday pay. Note you can over-ride the cash amount manually, and the remaining holiday pay will be calculated the next time the employee takes leave.

Leave loading (Australia)

The annual leave taken pay item can be set up to automatically add a leave loading pay item when it is added to the pay calculation screen. Select View, Setup, Pay Items and edit the 'Annual leave taken' pay item. In the bottom right side fo the screen, in the 'Miscellaneous Properties' area, click New to add a new property and then select 'CreatePayItem' as the property name and select 'Leave loading' as the value. Save the change, and then edit the 'Leave loading' pay item. Add a miscellaneous property called 'InheritPayItemUnits' and set the value for that to 'Annual Leave Taken'. Save the change. The next time you add an 'Anual leave taken' pay item to an employee's pay, the leave loading pay item will be added automatically, and the leave loading's units will be set to whatever units the annual leave taken is set to.

The leave loading pay item will pay 17.5% of the employee's annual leave paid. You can modify that percentage in the pay item set up screen if you wish.

The leave loading will be tax free or taxed according to the total leave loading paid so far in the tax year.