how do i set up annual salary with holidays & sick leave

Debbie Hammond

I have an employee that is changing from Casual to Full Time Annual Salary.  They are on $60,000 per annum with a base of 50 hours per week (inclusive of leave loading etc).  How do I adjust their Payroll set up to include Annual Leave & Sick Leave (4 weeks annual leave & 10 days sick leave) as i believe these calculations are in minutes now hours so it's very confusing.

Acctd4

Hi Debbie

You can change the Time format in your Preferences: 

• Edit (along top toolbar) > Preferences
• Click on "General" from the list on LHS
• On the "Company Preferences" tab, you can choose to "Show portions of an hour as ..." 
        * Decimal (eg 0.5)       or       * Minutes (eg 00:30)
• Click OK after to save your changes

The standard per hour accrual formula (based on 38 hours) is:

AL - 0.07692 (Reckon will usually round this out to 0.07694 which is fine)

1. 38 Hrs p/wk x 4 wks = 152 Hrs p/yr entitlement
2. 152 Hrs / 52 wks = 2.92 Hrs Per Wkly Pay
3. 2.92 Hrs p/wk / 38 Hrs = 0.07692 Hrs accrued per Hr worked 
   
   

SL - 0.03846 (Reckon will usually round this out to 0.03833 which is fine)

This is half, so 76 Hrs as per above, instead of 152

The same calculations as above can be done using any number of Hrs p/wk

I always use "Hourly" as the "Accrual Period" for accuracy, however you can choose "Per Pay" which would then be as per above to Step 2) 

NB Unless the employee is on an Individual Flexibility Agreement or depending on the Award that applies (if applicable), you may need to ensure that the base hours & rate are Fair Work-compliant.  Many Award-standard base hours are 38, with additional hours as required, however, permanent additional hours of 12 p/wk may or may not be considered ‘reasonable’.

At $ 60,000 p.a incl Leave Loading, the hourly base rate equates to approx $ 19.64 p/hr so make sure this is in line with FW’s minimum Award Pay entitlements. 

hours & rate are Fair Work-compliant.  Many Award-standard base hours are 38, with additional hours as required, however, permanent additional hours of 12 p/wk may or may not be considered ‘reasonable’.

At $ 60,000 p.a incl Leave Loading, the hourly base rate equates to approx $ 19.64 p/hr so make sure this is in line with FW’s minimum Award Pay entitlements.

karelfritz

Hi Shaz

How did you get the 19.64 above?

An employee has an annualised salary contract at 70k computed including the annual leave loading and first aid allowance with normal 38 hours a week.

Do I need to get the hourly rate so i can also track the annual leave and sl?

Say 70,0000/52/38 hours? $35.4251/hr

Appreciate you help.

Thanks

Fritz

Acctd4

Hi Fritz

You’re on the right track but you need to determine & deduct the annual Allowance amount & Leave Loading amount OUT of that annualised salary figure before calculating it back down to an hourly rate.

With STP 2 coming in over the next 12 months, these amounts will likely need to be reported separately so best to separate it from the start ☺️