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Calculated Holiday Schemes - Entitlement Pro Forma

Created on  | Last modified on 

Summary

This guide contains pro formas to help you reconcile the holiday entitlement for employees on a calculated holiday scheme in Sage 50 Payroll.

Description

You can set up a calculated entitlement holiday scheme for your employees which will calculate their holiday entitlement based on the average hours they have worked in a certain number of weeks prior to either the holidays year or the holiday period.

This guide will help guide you through the calculations done by Sage 50 Payroll to calculate this entitlement. 

TIP: You can print this article so that you can fill it in as you go.

Key Tips

There are a few key things to remember when looking at calculated holiday entitlement and their calculations:

  • Calculated holidays are typically based on a number of weeks prior to the holiday period. Therefore the calculation of their holidays may go up and down throughout the year if the employees hours vary each period. 
  • In order for the calculation to work, you must have ticked the 'Include for Weekly Averages' tickbox on any pay elements to be included in the calculation. 
  • The 'Include for Weekly Averages' must have been ticked in the periods Payroll is looking at for working out their averages.
    • For example, if your holiday scheme is based on an average in the 12 weeks prior to the Holiday Period, the box must have been ticked for the previous 12 weeks for the calculations to be correct. 
    • If the box hasn't been ticked for some or all of those periods, the calculations may not be correct and you will either need to reprocess or work out the entitlement manually until 12 weeks has been processed with the pay elements set up correctly. 
    • If you are unsure if the box was ticked for all pay periods, you should backup your data then restore back to an earlier backup to see how the pay element was set up at that time.

 CAUTION: If the averaging period includes Tax Week 53 the total number of working days in the averaging period needs to be adjusted to account for this as Tax Week 53 will only have either 1 or 2 working days as opposed to 5 for example.  Based on a 12 week averaging period, the total number of working days would be 56 or 57 as opposed 60.

Resolution

There are two pro formas depending on if your calculated holiday entitlement is based on weeks or days. 

Calculated Entitlement - Weeks
StepWhat you are doingWhat to doWorkings
ANote the stated entitlement in weeks

Employee Record > Absence > Holiday > Scheme Information


BNote the averaging period in weeks

Employee Record > Absence > Holiday > Scheme Information > Average period


CNote the total hours worked in the averaging period

Run a Payment Type History report for the averaging period, only including any pay elements that have 'Include for Weekly Averages' ticked.


D

Calculate the average amount of hours worked weekly in the averaging period

C / B
E

Calculate the average annual hours the employee would work based on this

D x 52
F

Calculate an employees annual entitlement for the whole year

D x A
GCalculate the total hours worked in the holiday yearRun a Payment Type History report for the entire holiday year, only including any pay elements that have 'Include for Weekly Averages' ticked.
HCalculate the employees accrued entitlement to date

F x (G / E)

This should be rounded up the nearest 1/4 hour, and any additional BF, CF or extra days due to long service would be added on top of this. 


NOTE: For the pro forma to work correctly, the you must run the Payment Type History for any pay elements ticked for 'Include for Weekly Averages' and they need to have been ticked for the entire averaging period. 
If a pay element is ticked for 'Include for Weekly Averages' now, it may not have been ticked at the time the records were updated. To check if this is the case, you should backup your data then restore back to the start of the averaging period to see how  the pay elements were set up at the time.


Calculated Entitlement - Days
StepWhat you are doingWhat to doWorkings
ANote the stated entitlement in daysEmployee Record > Absence > Holiday > Scheme Information

BNote the averaging period in weeksEmployee Record > Absence > Holiday > Scheme Information > Average period
CNote the total hours worked in the averaging periodRun a Payment Type History report for the averaging period, only including any pay elements that have 'Include for Weekly Averages' ticked.
DCalculate the number of working days in the averaging period

Employee Record > Absence > Holiday > Settings > Working Pattern.

Working Days in pattern x Weeks in Averaging Period


ECalculate the average amount of hours worked daily in the averaging periodC / D
FCalculate the average amount of hours worked weekly in the averaging periodC / B
GCalculate the average annual hours the employee would work based on thisF x 52
HCalculate an employees annual entitlement for the whole yearE x A
ICalculate the total hours worked in the holiday yearRun a Payment Type History report for the entire holiday year, only including any pay elements that have 'Include for Weekly Averages' ticked.
JCalculate the employees accrued entitlement to date

H x (I / G)

This should be rounded up the nearest 1/4 hour, and any additional BF, CF or extra days due to long service would be added on top of this. 


NOTE: For the pro forma to work correctly, the you must run the Payment Type History for any pay elements ticked for 'Include for Weekly Averages' and they need to have been ticked for the entire averaging period. 
If a pay element is ticked for 'Include for Weekly Averages' now, it may not have been ticked at the time the records were updated. To check if this is the case, you should backup your data then restore back to the start of the averaging period to see how  the pay elements were set up at the time.