In Sage 50 Payroll, you can set up holiday schemes to help you keep an accurate record of holidays booked and taken by each of your employees. A calculated entitlement scheme calculates holiday entitlement based on the average hours worked in a number of weeks before either the holiday year or holiday period.

To use holidays in hours:

• You must pay the employee by the hour in Enter Payments
• The relevant pay elements must have the Include for Weekly Averages check box selected

You can also set up specified entitlement holiday schemes in Sage 50 Payroll. Read more >

If you're unsure what holiday entitlement your employee should receive, for further help, refer to www.gov.uk/holiday-entitlement-rights.

For your scheme to calculate, you need to set it up before you process any periods that the scheme covers.

Set up a calculated entitlement holiday scheme

Let's run through the steps to set up a holiday scheme within Sage 50 Payroll:

1. On the Company navigation bar, click Holidays.
2. Click New then if required, amend the Scheme Number.
3. In Scheme Name, enter a name for the holiday scheme.
4. In Scheme Type, select Calculated Entitlement.
5. In the Entitlement tab, enter the following information:

   Entitlement of	Enter the number of days or weeks the employees on this scheme are entitled to.
   Based upon the average hours worked in the	Enter the number of weeks you want to calculate the average number of hours the employee has worked on.  You must set the pay elements used to pay the employee to Include for Weekly Averages.
   Weeks prior to	Holiday Year - Sage 50 Payroll refers to the number of weeks prior to the holiday year start date in the company settings to calculate the average hours Holiday Period - Sage 50 Payroll uses the specified number of weeks up to the current period to calculate the average working hours
   Accrue Holiday	This is automatically set to Hourly as your software uses the number of hours you process to calculate your employee's entitlement.
   Display Excess Entitlement Warning check box.	To display a message advising that the accrued holidays have been exceeded, select this check box.
   Allow Entitlement B/F From Previous Year check box.	To allow employees to carry over any unused entitlement to the next holiday year, select this check box.
   Allow Entitlement Advanced From Next Year check box.	To allow employee's to take holiday from next year's entitlement, select this check box.

6. Click the Settings tab then enter the following information:

   Scheme Start Date drop-down menu	Click Company Holiday Year or Employee Start Date.
   Working Day Pattern section	Enter the number of weeks you want to calculate the average number of hours the employee has worked on.  Enter the required working pattern. Non-working days are denoted with an N and working days by a Q. The working day pattern in Sage 50 Payroll runs from Sunday to Saturday.
   Pattern Start Date	Enter the first Sunday of the working pattern. Set this to a date prior to your holiday year start date for it to apply correctly.
   Additional Holiday Entitlement	To increase the entitlement based on length of service, enter the required information. You need to enter the total amount for each year. For example, if employees receive and extra day for every year that they work for you, for year one enter 12 in the Service Period (Months) column then enter 1 in the Additional Entitlement (Days) column. For year two, enter 24 in the Service Period (Months) column then 2 in the Additional Entitlement (Days) column. The additional entitlement appears when you advance the holiday year.

7. To set up a holiday fund that your employees can pay into, click the Payments tab. Set up a holiday fund >
8. Click OK then click Close.

Carrying annual leave forward into future years 

To carry holidays forward in Sage 50 Payroll, you can select the Allow Entitlement B/F From Previous Year check box in the holiday scheme settings.

1. Click Company then click Holidays.
2. Select the required holiday scheme then click Edit.
3. Select the Allow Entitlement B/F From Previous Year check box.
4. Click OK then click Close.

Alternatively, you can select the Override Entitlement check box within the employee's record then enter the updated amount of holidays in the new holiday year.

To do this: 

1. Double-click the required employee.
2. Click the Absence tab then click Holiday.
3. Click the Entitlement tab.
4. Select the Override Entitlement check box.
5. Enter the required amount into the Employee's Entitlement field.
6. Click OK.