one of my directors wants to be paid out 2 weeks annual leave rather than taking it - how do i recor

Lea Halton

Annual leave payout for a director who wants the money instead of taking the leave - how do i record it correctly in reckon 

Marilyn Strauss

I would like the answer as well.

Acctd4

Exactly the same as if they were taking it – From a leave accrual/taken basis, the leave hours will still be reduced by the 2 weeks being paid out.   I would add Notes in their Employee record &/or enter that is a cashout of AL in the Paycheque Memo.

 

Note, if the Director is also receiving a regular Salary/Wage, this additional payment of leave will (correctly) calculate a lot more PAYGW in the applicable pay period!  

 

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

Bruce

Before you do this, keep an eye on the industrial relations issues.   e.g. the situation in Victoria (12 months ago) was that anybody being paid out annual leave, without going on leave, must still have 2 weeks leave accrued after they have been paid out.

Charley

In NSW I think anyone must still have 4 weeks available before being able to cash out leave. Also when you pay out leave; leave loading does not apply 

Lea Halton

Thanks Shaz that's helpful - i have pretty much done that I think just assume for the pay period I just put the payment date but also do i let leave accrue on this payment like it does for a normal payment?  Do i also need to process Single Touch Payroll lodgement for this payment like I do any payroll I do?

Bruce

Always. Any time you pay someone you should be processing your STP

Acctd4

Hi Lea

 

• To maintain the accuracy of your pay periods, if the Director has already received a standard Pay for this pay period, I would use the last Pay Period date range again on the Cash Out.
• No leave entitlements accrue on cashing out of Leave - so tick the checkbox on the Pay for “Do not accrue time” - however the usual 9.5% SGC Super still applies.
• Yes, as Bruce said, any Pay run should be reported via STP.  If this Cash Out is done on a different date to your normal Pay run, then an additional STP submission will be required as you can only pick up pay runs based on Pay Date.

  

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

Lea Halton

Thanks very much for your help - much appreciated!

Acctd4

Modern award-covered employees are able to cash out a portion of their accrued annual leave. However, cashing out is subject to four very strict rules which must always be followed:

1. Employees can only cash out a maximum of 2 weeks' annual leave every 12 months.

2. An employee must always have a remaining balance of least 4 weeks after the cashing out has been processed.

3. Each agreement to cash out annual leave must be recorded/agreed to in writing.

4. The amount paid to the employee must be no less than the amount they would have received had the leave been taken

 (This means if Leave Loading normally applies, it is still applicable)

Award-Free/Enterprise Agreement & those not covered under any of these are also able to cash out leave subject to the above rules, with the exception being there is no restriction on the amount which can be cashed out in a 12 mth period.

 

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com