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long service leave entitlements appear to be incorrect.

AccountsMRS
2 Posts
Cover User
Australia

long service leave entitlements appear to be incorrect.

There appears to be a problem with the long service leave entitlements.  I have been on the phone to MYOB for over an hour with no luck trying to fix this.  It is set up for all employees paid hourly as being "2..4923% of gross hours".  However, I have an employee who just reached her 10 year mark and the calculations show that she is entitled to 11.85 weeks, which is incorrect, as in South Australia she is entitled to 13 weeks.  So, the percentage must be incorrect.  It shouldn't make a difference if an employee works 18 hours or 33 hours, it is 13 weeks LSL at either 18 or 33 hours, as the case may be.  I have had to manually adjust it to provide her, by doing a VOID payslip, to add in the different of 38.75 hours which she is entitled to.  However, it is still going to accrue incorrectly.  I shouldn't be expected to calculate it every year to ensure she gets the 1.3 weeks every year.  That's what this software is meant to do.  I have another employee who is on an annual salary, and it is set up as equals 0.938 hours per pay period.  How do I know this is correct?  I am going to have the same issues with her next year.  Does anyone have a correct solution to this to help me?

3 REPLIES
Ultimate Partner ronatbas
3,335 Posts
Ultimate Partner
Australia

Re: long service leave entitlements appear to be incorrect.

@AccountsMRS

 

Firstly, the accrual rate in MYOB is not set by the software and, in common with all accounting and payroll software, relies on correct setup. the 2.4 etc is incorrect and I believe should be set at 2.5% of Gross Hours.

(13 weeks divided by 520 weeks is 0.025). The extra 38.75 hours  that you had to allocate amounts to less than 5 minutes per week over the ten year period and could be readily explained by the set up error. The other problem with LSL is that if there has ever been variable hours or leave without pay the accrual for that time is decreased. In most states, the LSL regulations require part timers to be averaged over the past 5 years and this can mean that the LSL accrual needs to be adjusted up or down.

Secondly, your other employee's accrual further demonstrates that your payroll has never been set up correctly. Unless this person only work 0.32 of week or about 12 hours per week the accrual is far too little. There is nothing secret about accrual it needs to be set, for a 38 week, to accrue 152 hours(or 4 weeks) per year.

152 divided by the number of pays per year gives you the figure per pay period. For an hourly person the accrual per pay period is divided by 38 and multiplied by 100 to give the percentage. Once you have calculated the correct accrual you can put through a void pay to correct the accrued Holiday and Personal Leave as well as any others who have either LSL.

An employer has an obligation to ensure that the software has been set up to operate correctly and I would encourage you you to seek the assistance of an MYOB Certified Consultant experienced in payroll settings as it may save you a grief in the future.

 

 

Ron B
BAS Group
03 95588477

info@basgroup.com.au
Making MYOB work for you
AccountsMRS
2 Posts
Cover User
Australia

Re: long service leave entitlements appear to be incorrect.

Thank you for your response.  I know accruals aren't set by the software, but MYOB do post the accruals figures in their online help.  The accruals were set are 2.49%, and MYOB have advised they now say it should be 2.5%, as you state, which is basically what 2.49% is anyway, plus I have also spent an hour on the phone to MYOB who assured me that the accruals as set were correct. However, your explanation was much better about the hours worked over a 10 year period, as this employee's hours have changed and she was on a lot less hours previously, which probably explains why she is entitled, according to MYOB, to a little under 12 weeks LSL instead of 13.  Our other salaried employee doesn't work full time any longer either, but I do need to look into this more fully.  Thanks again for your response and we know our obligations and will ensure, with the further assistance of MYOB, that it is set up correctly.

MYOB Moderator Steven_M
17,848 Posts
MYOB Moderator
New Zealand

Re: long service leave entitlements appear to be incorrect.

Hi @AccountsMRS

 

Great to hear that @ronatbas has been of assistance to yourself with your long service leave entitlements.


In terms of the Online Help offer by us on this topic, I assume you where referring to Help Article: Long Service Leave in particular section Set up a long service leave entitlement. The particular section of the Help Article indicates the formula used that we recommend being used to determine the calculation rate percentage. Along with that there are a few examples, one of which will result in 2.5% as the leave accrual. These are designed to be examples of the calculation in use. Ideally you should be consulting with a third party, such as an MYOB Partner or accountant or leave entitlement expert, to ensure that you have the accurate values for entering into the calculation to provide the required required calculation basis percentage for your needs.


Kind Regards,
Steven
MYOB Client Support
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