Forum Discussion

Amanda7875's avatar
Amanda7875
Contributing User
6 years ago

RDO's and Annual Leave and personal leave accrual

Good Afternoon   I have set up our system to pay a 38 hour week with 2 hours per week banked for an RDO, however when people take leave and I am paying them 7.6hours but their actual annual leave o...
  • Steven_M's avatar
    Steven_M
    6 years ago

    Hi Amanda7875 

    The only configuration that I can foresee the following situations meet would be with the process outlined below:

    • Reduce the entitlement by 8 hours
    • Pay the employee 7.6 hours
    • have 0.4 hours accrued as RDO

    The set up required to achieve this:

    1. Create a new wage category - "RDO Holiday Pay Reduction" (or something similar). 
      Payroll>>Payroll Categories>>Wages>>New
    2. Link that new payroll category to the employee(s)
      Payroll>>Payroll Categoires>>Wages>>Select the desired category>>Employee and tick the desired employee

    The process of the pay:

    1. Enter the full holiday pay amount (8)
    2. Enter a negative amount against the newly created leave reduction category (0.40)
    3. Enter/Ensure the desired amount of hours in Base Hourly (30.40)

    For example

     

    What this does is it will reduce the annual leave entitlement by the required amount of hours ( 8 ) as you have entered that number of hours against the linked wages category. You are paying the employee for 38 hours = 30.40 + (8 - 0.4) and the entitlement has accrued on 38 hours (38 x 5.263% =2.0)

     

    To ensure that the above method does work for your reporting requirements I would recommend running that past an accountant and payroll advisor.

Amanda7875's avatar
Amanda7875
Contributing User

Good Morning Neil

 

I understand what you are saying but I need to reduce the annual leave accrual by 8 hours, pay the employee 7.6 and bank 0.4hours into the RDO accrual, how do you suggest I set this up in my system?

 

If I only reduce the annual leave accrual by 7.6 and still bank the 0.4 in the RDO accrual the employee is essentially getting 0.4 hours for nothing.

 

Please advise

Thank you

Amanda

Neil_M's avatar
Neil_M
Former Staff
6 years ago

Hi Amanda7875 

 

As the leave being paid out is just another payroll category, no different than what they are normally paid on (excluding the linking to the entitlement).  So all you are doing is substituting one wage category for another on the pay, and treating the RDO that they earn in the same way. As long as 8 hours was recorded against the linked wages category that would reduce the entitlement by 8 hours

 

 

  • Amanda7875's avatar
    Amanda7875
    Contributing User
    6 years ago

    Hi Neil

     

    But then I am paying 40 hours to the employee instead of 38 and they still get 2 hours RDO accrual. 

    • Amanda7875's avatar
      Amanda7875
      Contributing User
      6 years ago

      Hello Again Neil

       

      I believe it would be easier if I paid them 7.6hours and deducted 0.4 from the RDO Accrual manually.  It just means that when they have a few weeks off they are not accruing for the pending RDO therefore will almost always have a negative accrual figure for RDO's.

       

      Sorry for the constant what ifs but it is not clear to me and the last thing I want to do is pay my employees incorrectly.

       

      Thank you

      • Steven_M's avatar
        Steven_M
        Former Staff
        6 years ago

        Hi Amanda7875 

        The only configuration that I can foresee the following situations meet would be with the process outlined below:

        • Reduce the entitlement by 8 hours
        • Pay the employee 7.6 hours
        • have 0.4 hours accrued as RDO

        The set up required to achieve this:

        1. Create a new wage category - "RDO Holiday Pay Reduction" (or something similar). 
          Payroll>>Payroll Categories>>Wages>>New
        2. Link that new payroll category to the employee(s)
          Payroll>>Payroll Categoires>>Wages>>Select the desired category>>Employee and tick the desired employee

        The process of the pay:

        1. Enter the full holiday pay amount (8)
        2. Enter a negative amount against the newly created leave reduction category (0.40)
        3. Enter/Ensure the desired amount of hours in Base Hourly (30.40)

        For example

         

        What this does is it will reduce the annual leave entitlement by the required amount of hours ( 8 ) as you have entered that number of hours against the linked wages category. You are paying the employee for 38 hours = 30.40 + (8 - 0.4) and the entitlement has accrued on 38 hours (38 x 5.263% =2.0)

         

        To ensure that the above method does work for your reporting requirements I would recommend running that past an accountant and payroll advisor.

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