Annual Leave Loading Accrual

Annual Leave Loading is usually a percentage of the employee's pay rate (currently 17.5%), which is added to pay when leave is paid out. Below is an example of how to set up Annual Leave Loading so that it can be accrued, and then paid out either at a designated time or at the same time that Annual Leave is paid. The accrual integrates with the General Ledger if required, and can also be revalued if the employee's rate of pay increases.

To set up the Annual Leave Loading Accrual:

1. Set up an Accrual Rule for Annual Leave plus Annual Leave Loading. Only one Accrual Rule is required. Below are examples of how to set up for accruals based on either Hours per year, or a Percentage of hours in an Accumulator.

   a) Where based on X hours per Year

   b) Where based on Percentage of hours in Accumulator

2. Set up a Pay Transaction Type for Annual Leave Loading.

   On the Main tab, set these options:

   • Calculation Method: Rate Modifier
   • Qty Accumulator: Leave Loading
   • Transaction Type: Transaction Type for Ordinary Hours (for example, 220)
   • Modifier: 0.175 (17.5%)

   Configuration Tab

   Select the accumulators the Annual Leave Loading is to be added into.

   Balances Tab

   Select the Balance Accrual option.

   Automatically create for new employee is selected where all employees are paid Annual Leave Loading. This will create a default Annual Leave Loading Accrual Line in the Employee Maintenance > Balance Tracking > Transaction Types clever table for each new employee.

   Deselect the Automatically create for new employee option where lines must be manually added for the employees Annual Leave Loading Accrual applies to.

   If Accrual rule must be specified is selected and a Default rule selected, this rule will also be added.

   Note: If more than two rules apply to the same Transaction Type, only one can be set as the default. You can:

   • Leave the Default Rule blank and set it manually on the Balance Tracking tab for each employee;
   • Specify a Default Rule on Transaction Type (as below) which will then apply to all new employees, and will must be changed manually for any employee that a different Accrual Rule applies to.

   Note: Where Accrued Leave Loading is to be paid out when an employee terminates employment, a 'Transfer to' Transaction Type will must be created and selected in order for balances to be transferred on termination.

3. Confirm setup for Annual Leave Transaction Type.

   Auto Add the Annual Leave Loading Transaction Type (202LL) and enter a reducing line (if required).

   Note: If you add a reducing line, you must select the Apply Automatic Reduction for Leave Lines option on the Employee Maintenance | Options tab.

4. Set up two employees with starting dates of 1/7/2018, who do 40 hours at $20 per hour.

   Employee 1010 has Annual Leave calculation based on number of hours.

   Employee 1011 has Annual Leave calculation based on a percentage of hours worked.

5. Process the pays, which creates Annual Leave Accruals and Annual Leave Loading Accruals.

   Note: The quantity accrued is the same as for Annual Leave. The amount is 17.5% of the Annual Leave accrued value.

6. Pay out Annual Leave. Annual Leave is paid at the ordinary rate, whereas the Annual Leave Loading is paid out at a rate of 17.5% of the Annual Leave rate.

   Note: The 202LL transaction type line was automatically added to the pay because it was selected against Auto Add on the Transaction Type - Pay | Configuration tab.

   This is reflected on the Transactions > Balances tab:

   202 - Annual Leave

   202LL - Annual Leave Loading

7. Repeat for Employee 1011 who accrues on a percentage of hours worked basis.