Set up a calculated entitlement holiday scheme

How to set up a calculated entitlement holiday scheme in Sage 50 Payroll.

Set up holiday schemes to record holidays booked and taken by your employees. A calculated entitlement scheme is based on the average hours worked in the weeks before the holiday year or holiday period.

To use holidays in hours:

• Pay the employee by the hour in Enter Payments
• Select the Include for Weekly Averages check box

You can also set up a specified entitlement holiday scheme in Sage 50 Payroll.

If you're unsure on the correct holiday entitlement for your employee, find further help at gov.uk.

 NOTE: For your scheme to calculate, 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 entitlement of days or weeks for the employees on this scheme.
   Based upon the average hours worked in the	Enter the number of weeks on which to calculate the average number of hours the employee has worked.  Set up payments to include Weekly Averages.
   Weeks prior to	Holiday Year - The number of weeks prior to the holiday year start date, in the company settings to calculate the average hours Holiday Period - The specified number of weeks up to the current period to calculate the average working hours
   Accrue Holiday	Sage sets this to Hourly automatically, as it uses the number of hours you process to calculate your employee's entitlement.
   Display Excess Entitlement Warning check box.	Select this to display a message advising that the employee has exceeded the accrued holiday limit.
   Allow Entitlement B/F From Previous Year check box.	Select this to carry over any unused entitlement to the next holiday year.
   Allow Entitlement Advanced From Next Year check box.	Select this to allow employees to take holidays from next year's entitlement.

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 show as an N and working days with a Q  NOTE: 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 the length of service, enter the required information. Enter the total amount for each year. For example, if employees receive an 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 for your employees to pay into, click the Payments tab.
8. Click OK then Close.

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Carry annual leave forward into future years 

Set your holiday schemes to carry holiday entitlement forward.

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