Set up Holidays

This guide covers how to set up and configure holidays in paiyroll®.

Overview

The principle is that pay received by a worker while they are on holiday should reflect what they would have earned if they had been working.

Holiday schemes provide a rich way of capturing most types of holiday arrangements.

paiyroll® supports holiday in units of hours or days. That is holidays, can accrue in hours or days and can be booked in hours or days.

Different working patterns are supported as shown below:

Working patterns

Work pattern

Fixed

Variable

No

Description

Fixed pay and fixed hours

Variable hours or pay (regular overtime, commission or bonuses)

No fixed hours (irregular, casual work, zero-hours contract)

Holiday pay

Only on leaving or holiday year end

Yes

Yes

Entitlement (set on employee Pay Item input)

Annual entitlement

Annual entitlement

Entitlement earned - calculated and updated after payrun approval

Remaining this year

Annual entitlement + (Carried over + Bought - Sold) - Approved bookings

Annual entitlement + (Carried over + Bought - Sold) - Approved bookings

Entitlement earned + (Carried over + Bought - Sold) - Approved bookings

Entitlement year to date

Displayed after payrun approval for information

Displayed after payrun approval for information

–

The following are common to all working patterns:

Holiday common

Reset date (Year starting)

This date (day and month) is rolled forward each year and is used to reset the holidays. Alternatively, if the special ZERO date 01/01/0001 is entered, then each workers start date is used as their own unique reset date.

Holiday taken before import to be used in the first holiday year

Set on Migrated taken input (auto cleared on next pay run).

Entering entitlement after import

Enter full annual entitlement

Pay out on leaving

Automatically

Pay out on holiday anniversary date

Automatically subject to scheme sell limit

Carried over, Bought and Sold

Displayed if scheme limits are not zero

The days that are bookable can be specified as follows:

  • Use the working days as set on each employee record, where public holidays and weekends do not count in the holiday allowance.

  • Use the working days as set on each employee record, but ignore public holidays so these count as a booked days.

  • Specify that any number of days can be booked per week and that public holidays and weekends are ignored.

Display and reports

All days, dates and durations listed above are displayed when the holiday request is first created on the mobile view. The same information is then available when a request is approved by a manager or administrator,

The Pre-approval summary2 report Holiday entitlements tab includes the full holiday report.

Step-by-step set up

Here are the steps to set up holiday:

  1. First, you will need to determine which Pay Definitions contribute to holiday pay. To do this you will need to categorise every Pay Definition and whether it forms part of holiday pay. You will have 2 lists, those included in Holiday pay and those excluded:

    • Included

    • Excluded

    Salary based items are always included.

  2. By default payment Pay Definitions are set to contribute to holidayable earnings and are by default included. That means the Output on the Pay Definition is checked (a tick mark) for the Holidayable earnings Buss.

    Remove Pay definition outputs from the Holidayable earnings buss for any category of Pay Definitions that should be excluded from holiday pay. This is done by editing each Pay Definition and un-ticking (clearing the checkmark) for the output which connects to the Holidayable earnings. Once complete, the system will automatically maintain the history of all included values on the holidayable earnings buss.

  3. The next step is to add a Holiday Pay Definition scheme. Add a Pay Definition using the Holiday scheme Pay Template. Set the Inputs according to your scheme:

    • Units must be set to either Days or Hours and controls the entire operation of the holiday scheme.

    • Start date (Optional) is usually not required and will default to 0001-01-01 there by having no effect. It can be used when importing a new company and holiday history is not available - In this case, 52 week average, would incorrectly pick up zeros for the preceding period which would result an incorrect average. Another common scenario is where workers change scheme and any old history needs to be ignored.

    • Reset date is the holiday anniversary date. This is used for Fixed work pattern but not for No work pattern.

    • Working pattern should be set to Fixed for salary-based employees. If the employee Also receives variable remuneration, for example, overtime, or bonus or commission, and that needs to be topped up then the Variable values should be set. Irregular workers with no working pattern (or zero-hour contract workers) would have the setting No setting.

    • Carry limit can be used to limit how many unused days can be carried over

    • If you operate a holiday buy/sell arrangement, then Buy limit and Sell limit can be used to limit the number of days bought or sold in a holiday year. Simply set to zero if not used

    • An Exceed limit can also be used to limit the number days or hours booked above the YTD entitlement.

    • There are 3 different Average formula settings, either based on pay or based on an rate:

      • Pay - all periods will average all pay including zero by the pay period (monthly, 1/2/4-weekly) by adding up total pay and dividing by the number of periods.

      • Pay - Only paid weeks will only average non-zero weeks by adding up total pay and dividing by the number of non-zero weeks.

      • Daily or Hourly rate will determind an everage rate by by adding up total pay and dividing by total hours or days.

    • Average period weeks defined how many weeks should be used for averaging weekly pay. 52 weeks is the default

    • Max history weeks defines the maximum history to keep - important for looking back over a longer period where there are unpaid weeks.

    • Bookable per week can be configured to different booking periods. For example, if a worker were to book Monday to Sunday (7 days), this can be configured to book 5 days or 7 days.

    • Units per week Determines how many units each week will be divided into for holiday. For example, if using days, 1 week may divide into 5 days. Similarly if using hours a week might be divided by 37.5 hours. You can either specify a fixed number which will apply to all workers.

      More typically the special value zero means use the employees working days or salary scheme (specified elsewhere ) hours to determine the units per week:

      • Days are usually defined by the Working days field on the employee. The default MOn-Fri means 5 days per week.

      • Hours are usually specified on a Salary Scheme. For example 1950 annual hours is 37.5 hours per week. If you define the general company hours this way, any employee, whose hours vary can then be easily accommodated via the FTE (Full Time Effective) field on the the employee. For example an FTE of 1.0 means 37.5 hours a week, however, an FTE of 0.8 means 30 hours a week etc.. FTE data can be uploaded from a spreadsheet ot an HR data-feed.

    • Entitlement accrual and optionally Entitlement percentage can be set according the method required to accrue holiday leave.

    • Payout balance controls when a holiday balance is paid out.

    Note

    If you have different types of workers, then you can set up as many schemes as required.

    Important

    There is no automated support for switching holiday schemes mid-year. If you change a scheme mid year, the holiday pay definition will not operate correctly. The only way to change schemes is to set up a new scheme, and either switch at the beginning of a new holiday year, or upload new history which reflects the new scheme history at the point of switching. You should contact paiyroll® support for assistance and advice in switching holiday schemes.

  4. Attach a Holiday Pay Item to each worker using the Pay Item editor:

    • Select the holiday Pay Definition created above for the frequency required (e.g. m1 or w1) and click Create to add a Pay Item to each worker

    • Click Update to confirm the change

    • In the row for the newly added Pay Item, set the Annual entitlement to the number of holiday days e.g. 28

    • Set the Migrated balance to migrate one-time values of holiday position up to the first payrun where holiday will be operated in paiyroll®. Carried over days are positive (+) while taken days are negative (-). After the pay run the values are cleared. If you make a mistake you can re-enter a migrated value for a future pay run.

    • Set the Buy or sell Set to zero unless you operate holiday buy or sell where you will enter the number of holidays bought or sold.

    • Set the Scheme to the scheme defined earlier

    • Click Update to save these changes

Operation

Holiday operates as follows:

  • Holidays are booked and approved using a holiday workflow thereby recording the start, end and holiday duration in hours.

  • Holidays can also be uploaded from a spreadsheet files using the holiday data feed

  • All repeating Pay Items (based on Salary Pay Template) continue to output ‘pay’ during any holiday.

  • Non-repeating Pay Items that are likely to decrease, will be compensated by holiday pay. This is automatically calculated and provided by the Holiday Pay Item.

  • Excluded Pay Items are by definition excluded.

  • Unused holiday pay is paid out on leaving or at holiday anniversary for employees on a Fixed working pattern.

Examples

Below are examples of how holiday works for different types of employees.

  • A salaried employee with a Fixed work pattern and fixed salary books a 10 day holiday. In this case, no additional holiday pay will be added by the holiday Pay Item. The holiday balance will decrease to 18 days.

  • A sales worker who earns salary and Variable commission takes a 2-week holiday and is unable to earn full commission during their holiday. Although their salary will be paid normally during the holiday, the holiday pay item will contribute an average commission value to reflect what they would have earned if they had been working.

  • A zero-hour contract worker (No work pattern) books a holiday. During the holiday they will normally not receive any pay from other Pay Items. The Holiday Pay Item will look back over 104 weeks of history and find 52 paid weeks of pay. All values will then used to determine an average weekly pay figure. The conversion of 1 week to days depends upon the number of employees working days and the days the holiday was booked for. An employee who works 5 days per week (Mon-Fri) and who takes 2 weekday holidays will, therefore, earn holiday of 0.4 x weekly pay.

Troubleshooting

If there is no holiday pay, it may be due to the following:

  • Missing holiday history. This can be uploaded from Toolshed > Company upload Holiday Pay

  • Does the employee have a salary item, which is linked to a salary scheme to specify the number of annual hours?

  • Is there a valid holiday booking?

  • Have hours been entered on bookings if hours are in use?

If holiday history is recorded in months and not weeks, you may encounter situations where 52-weeks, being 364 days, means that entries on day 365 or 366 fall outside a 52-week period. In this case, you may need to move the monthly dates away from the month start/end boundaries. For example a 52-week period from 2-May-23 to 1-Apr-24 with 1st of the month history dates will miss payments on 1-May-23 and only average 11-months. Moving the dates away by 2-days to the 3rd or even mid-month can resolve the issue.