Setting up leave entitlements in my Reckon Accounts Plus

Sharon Letton

Hi, I hope someone can help me out. I am wanting to set up Annual Leave and Sick Leave in my Reckon Accounts Plus for my permanent part-time employees correctly. Correct me if I am wrong but they are entitled to 4 weeks of annual leave based on their ordinary hours of work. How do I set this up?

I have part-time employees who are on different agreed amount of hours worked per week. I have just learnt they are all entitled to 4 weeks of annual leave when they work the agreed amount of hours.

Sick Leave is 10 days each year but depends on their hours worked. I think I have this set up correctly!

Thank-you in advance

Sharon

Acctd4

I always set up Leave Accruals on an Hourly Basis (never Per Pay or Per Year) because this then allows it to calculate correctly regardless of variable hours worked.

Unless the relevant Award states otherwise, employees accrue 20 days (4 weeks) Annual Leave (AL) & 10 days (2 weeks) Personal Leave (PL) per year, however BOTH are pro rata'd for part time hours (eg if an employee works part time 2 days p/wk, they still accrue the 4 weeks AL & 2 weeks PL HOWEVER, their 4 weeks will only be at 2 days p/wk (eg so they will accrue 4 weeks of 2 days - 8 days total - AL & 2 weeks of 2 days - 4 days total - PL) '

There was a recent case regarding PL entitlement due to an employee who worked longer regular days than the standard (eg a 9-hr day) & the case actually originated because when on PL, they were only being paid the standard 7.5 hrs instead of their (usually-worked) 9 hours. Employees should always receive Leave paid at the equivalent of what they would have been paid had they been working!

Part of this case raised a requirement of a flat 10 days p/yr PL regardless of actual employment basis, however this was rejected (& rightly so!) & the original accrual/entitlement remains (as per employee's usual work hours).

Sharon Letton

Thank-you Shaz Hughes, you have come to my rescue once again. Maybe I should have you on speed dial! I'm pretty sure I have been doing it right with my formulas in Reckon then, just over thinking it.

This is what I read on the Fair Work Ombudsman site which confused me:

Who is entitled to annual leave?

All employees (except for casual employees) get paid annual leave.

How much annual leave does an employee get?

Full-time and part-time employees get 4 weeks of annual leave, based on their ordinary hours of work.

Example: annual leave for part-time employees

Jane is a part-time employee who works 20 hours per week for a year.

During one year, she will accumulate 80 hours of annual leave (the equivalent of 4 weeks work for her).

I read this and I got confused!!!!

Don't we all love a new financial year! :(

We are also offering a current permanent part time employee a salary position. Is there anything different I need to know in regards to Reckon set up etc? I want to get that right from the start hopefully. Are there any extra leave entitlements that I need to be aware of?

Sorry for all the questions but I feel like you need a uni degree to keep up with all the employee awards and entitlements.

Acctd4

No, nothing different ☺️

Make sure you check the relevant Award that applies (if you're unsure, you can look it up here: https://www.fairwork.gov.au/awards-and-agreements/awards/find-my-award/) as this will dictate the specific minimum entitlements.

I would still be using an Hourly Payroll Item as the Salary Payroll Item tries to allocate automatically across any breakdowns on Pays (eg Leave, Public Holiday etc) so can sometimes be a bit fiddly to get the right result.

Sharon Letton

If I continue to use a hourly payroll item won't this continue to accumulate to his holiday and sick leave? I thought this is included in his salary! I'm sorry if I'm not understanding what you mean. My husband and I both receive a salary through the books and no leave entitlements are calculated

Acctd4

That will be because you've not set up the Salary Payroll Item to accrue any Leave entitlements! Depending on the size of the business, some business owners don't bother to track leave entitlements for themselves because they usually work way in excess of employee's standard hours anyway so just pay themselves a flat Salary amount regardless.

Using "Salary" or "Hourly" is simply how they are paid eg whether a fixed/set amount is on the pay (see A below) v an Hourly rate (see B) against which you enter the number of hours for the amount to calculate accordingly.

The Leave entitlements that accrue are the same in either case.

As an example ...

Employee A works a 38 hour week on an annual Salary of $ 79,040, paid weekly.

This is equal to:

A a weekly Salary amount of $ 1,520 ($ 79,040 / 52 weeks) OR

B an Hourly Rate of $ 40 p/hr ($ 79,040 / 52 weeks / 38 hrs p/wk)

Regardless of which method you use, Employee A still has the same Leave entitlements & therefore both Payroll Items (Salary & Hourly) are configured to accrue this.

Does that make sense ? 😁

Sharon Letton

I think so, I'll give it a go & hopefully I'm doing it right!