The best way to calculate annual leave for a mix of FT and PT employees?

MM_7769277
MM_7769277 Member Posts: 115
edited April 2020 in Accounts Hosted
Where you have a mix of full time and part time employees, is it better to set up Payroll to calculate leave based on the number of hours that they work, instead of a set number of hours each pay?

I'm setting up new books for a company so it's a good opportunity to get it right from the start.

From Google:
2.9231 ÷ 38 (hours per week) = 0.0769 hours per hour paid (including paid annual, sick & long service leave). The hourly accrual figure is used for calculating accrual for both part-time and full-time employees.

Comments

  • Shannon Sciuto
    Shannon Sciuto Member Posts: 98
    edited February 2018
    yes - that's what I do - but be aware if you the employee works more than the 38 hours per week then they will accrue additional leave in that week.  

    It's a good method to avoid accruing during unpaid leave too.  

    I'm with you on the math for Google but not sure on the explanation: 

    I work out annual leave as 4 (weeks) x 38 (hrs/wk) / 52 (weeks/yr) / 38 hrs (for an hourly accrual rate).  Or .0769/hr. 

    For sick leave, divide by 2 again. 

    LSL (long service leave) is a whole different kettle of fish and I don't know the entitlements by heart as most of my clients are covered by QLeave.   

    I think it is...   40 weeks leave for 10 years of service.  

    In that case it would be 40weeks * 38hrs (total hours to accrue) / 10 years / 52 weeks / 38hrs = 40 *38/10/52/38 = .0769/hr  

    ** I know in this situation in the formula you could drop the 38hrs from the equation but its easier to understand it this way. 

    I hope this helps. 


  • Kwikbooks (Professional Partner)
    Kwikbooks (Professional Partner) Member Posts: 824 ✭✭✭
    edited April 2020
    Hi MM

    for full time employees the safest method is accrual per pay period, on a 38 hr week this is 2.923 hrs accrued per week, this will give them the required 152hrs p.a based on a 52wk year. - if you calculate over a 40week year you have to remember to turn off accrual for the weeks you pay annual leave or they will over accrue, and sometimes they only take 1 or 2 days annual leave in the week and this will be a nightmare to  calculate.  STay with 52 week leave accrual.

    Most awards state a full time employee is entitled to 4 weeks annual leave p.a + loading, they also allow for 2 or 3 days unpaid leave and there is  no mention of withholding a/l & P/l for the day that is unpaid, because they are full time.

    This will also solve any issue of accruing extra hours on any overtime and is essential in the case of employees working 40hrs and getting paid 40hrs (@ 38hr rate) as the business doesn't have Rostered days off. If they were having rostered days off they would work 40, get paid 38 and have one day off per month with pay.... if they are getting paid 40hrs and working an 8hr day, it is much easier to accrue at a 40hr week and pay leave at 8hr day, (160hrs = 3.077 hrs p. wk)

    In the case of personal leave, if you divide the by 2 again this would give the employee 10days personal leave a year and some awards have 12 days, some more, some less if in the first year of employment. so this will have to be a separate formula based on sick/ bereavement/ compassionate leave hrs according to award.

    Permanent part time needs it's own calculation depending on hrs worked in week, again the safest is to set up per pay period based on the employment contract.  If they are employed for 15hrs per week, and work a few extra hours or one day to cover for someone else this in effect is outside normal hours and should  not factor in leave.  Again it depends on the terms of their employment, fi min. 15hrs + then every hour worked is the way to go.

    LSL is 1 calendar month after 5 years if they leave or terminated (164.66hrs)- 2 calendar months after 10 years (329.33hrs) based on 38hr wk.  A different calculation applies if 40hr week, or permanent part time.  If the hours have changed over the 5-10 year period say from PPT to full time then an average of hours can be taken or you have to go back and work out an accrual year by year.

    KiM 0429 305300  Kim@kwikbooks.com.au 

  • Kwikbooks (Professional Partner)
    Kwikbooks (Professional Partner) Member Posts: 824 ✭✭✭
    edited April 2020
    Try going to the employees card, edit > employee info (3rd tab) & make sure the employee is set to full time & weekly hrs 38.  Then try again

    This has been a problem with Reckon for 20years and I have reported this many times and asked for 3 decimal place accrual in all leave entitlements as 2.923 works our exactly to the hours.
  • Steve Cocks
    Steve Cocks Member Posts: 1
    edited October 2017
    8.6667 weeks for Long service leave for 10 years of continuous service in QLD.
    https://www.business.qld.gov.au/running-business/employing/employee-rights/long-service-leave/entitl...