Automatic Leave Accumulation in Payroll

Overview

Irregular or casual employees accumulate hours on the basis of the hours they worked, but how are they calculated by Talexio? And what do you need to do?

Please note that this automatic calculation applies only if you have the Payroll module enabled. If you do not have the Payroll module, leave entitlement for extra hours worked by employees on a fixed part-time schedule, or casual workers, per month, should be manually calculated based on hours worked and added to the relevant employee’s leave entitlement as an adjustment. For more information on how to adjust leave entitlement, click here: How do I change Leave Entitlements for an individual employee?

Contents

1. Permissions
2. Initial set up
3. How are the hours calculated?
4. Method One: Job Schedule Hours
5. Method Two: Actual Hours
6. Where are the hours added?
7. Leave entitlement for fixed part-time employees
8. Leave Accrual Calculator

Permissions

You need to ensure that you have the 'Manage payroll' permission to access payroll and see the hours which are being added. 

Initial set up

For hours to be accumulated automatically to a payslip, you need to ensure that the following settings are in place: 

1. 1. Full time: the employee's job schedule must not be a full time. Therefore, in the job schedule, make sure full time is unticked. 
   2. Fixed Schedule: the employee's job schedule must not be a fixed one. Therefore, in the job schedule, make sure fixed schedule is unticked.
   3. Leave Accumulation Mode: if full time is ticked, this option will not be available. For non-full time employees, however, you will need to select whether they:
      1. • Accumulate leave on ALL their basic hours;
         • Accumulate leave on the basic hours that are approved through T&A only (please note that you will need the Time & Attendance module to make use of this option);
         • Accumulate leave on any extra basic hours only. This means that leave is accumulated on any extra basic (non-overtime) hours added to the employee's basic hours over and above the normal basic hours: 
           
           
           
           
         • Does not accumulate: with this option selected, the employees on this job schedule will not accumulate leave automatically. 

How are the hours calculated?

Once you have the job schedule set up correctly (and after you have added the employee(s) to Talexio), then you may create your payroll. 

You will notice a new field entitled 'Accml. Vacation' at the bottom of the Totals column with the amount of accumulated leave added through this payslip: 

The same holds true for all other leave types which the employee is entitled to: 

But where do these figures come from? There are two types of calculations, and these depend on how the employees are being paid: 

1. On the basis of their job schedule hours (for example, an employee whose job schedule stipulates that they work 40 hours 5 days a week, will be paid 173.3333 hours per month. This is calculated as 40 hours *52 weeks/12 months);

2. On the basis of their clockings (for example, an employee has 170 hours worth of clockings approved for a month, and so is paid on those clockings). Please note that you will need the Time and Attendance Module for this.

Method One: Job Schedule Hours

If an employee is paid on their job schedule hours, the calculation for accumulated leave hours is simple:

Hours worked x Leave entitlement / Total hours worked by a Full time employee in a year = accumulated leave for the period

Let's take an example of an irregular employee whose job schedule is set to accumulate leave on All basic hours. In this case, the employee worked 45 hours (30 are basic hours worked and 15 are from public holidays accumulated throughout the quarter - check here for information on how public holiday hours are calculated for irregular employees). 

Therefore, for vacation leave: 45 hours x 224 hours (2022 yearly entitlement)/ 2080 hours = 4.85 hours. To convert this into minutes multiply the .85 by 60 minutes = 51 mins. Therefore, the accumulated vacation leave for the period is 4 hours 51 mins. For other entitlements, the only difference in the calculation  would be the yearly entitlement. 

If you would like to run this calculation with a specific employee in mind, then please download the calculator attached and complete these fields with the employee data:

• Payroll Pay Date
• Hours Worked in Payslip
  
  

Method Two: Actual Hours

If an employee is based on the basis of their clocked hours, the calculation is as follows:

Job Schedule Hours (working days x job schedule hours) - Actual hours (total hours in payroll) = X amount of hours x Leave entitlement / Total hours worked by a Full time employee in a year = accumulated leave for the period

For example: an employee clocked 60 hours in August 2022 and has 20 hours of leave. The actual hours are 80 hours.

The employee is on a 20 hour per week schedule and can work 5 days a week (Monday-Friday). The Job Schedule hours are 23 working days in August x (20hours/5 days a week) = 92 hours. 

Therefore, the accumulated leave hours are: (92-80)*224/2080 hours = 1.29 hours

Where are the hours added?

The accumulated leave will be automatically allocated to the relevant employee’s leave balance when the employee's payslip is locked. 

To check an individual’s leave balance, go to their profile, click on the Leave tab you will be able to see their Leave Balance pod (as per the below screenshot): 

Leave entitlement for fixed part-time employees

Employees who are on a fixed part-time job schedule (ex. 20 hours a week) are entitled to additional pro-rata leave entitlement when they work more than their job schedule hours per month (ex. 86.67 hours per month in the case of a 20 hour week).

In your payslip calculation, only hours that are added as Extra basic hours will account for additional hours worked. 

For example: the above employee works on a 25 hour week schedule. He works 108.3333 hours per week. In June 2022, he worked 98.3333 hours + has 10 hours from public holidays = 108.3333 hours total. 

Now, over and above these 108.3333 hours, the employee works an extra 20 hours.

Therefore, extra entitlement is added to the employee's leave balance. This extra accumulated leave is worked out the same as for irregular employees:

20 hours * 224/2080 = 2.15 hours = 2 hours 9 mins.

Leave Accrual Calculator