Forum Discussion

Dee2016's avatar
Dee2016
Cover User
6 years ago

How to interpret a negative leave accrual situation

Hi,    I've got a complicated situation where an employee didn't have enough accrued leave to be paid for all of the annual shut-down period and the boss felt sorry for him (because the employee wa...
  • Steven_M's avatar
    Steven_M
    6 years ago

    Hi Dee2016 

     

    MYOB Essentials is a little bit different in terms of average weekly earnings and unpaid leave.

     

    Generally, if an employee did not work for whatever reasons you wouldn't enter a pay for that employee. As the Average weekly earnings is based on the gross earnings for the 12 months since the date of the start of the pay period as you are not processing pay for them you are losing weeks at the top end. For example say I paid my employee $500 for one week and then for the next 51 weeks I paid them $100, the gross earnings for the 53 week would only be based on the 51 weeks of $100.

     

    In most cases. if you have not paid the employee then you would need to file anything to the IRD for this be it through PAYE purposes or Payday filing.

jenniek's avatar
jenniek
Ultimate Partner
6 years ago

Hi Dee2016 

While the employee is still employed he is still acruing leave at his ordinary hours per week - whether he is working these or not. Depending on which Payroll programme you are using - you should be using unpaid leave to record hours not worked. However he is still effectively earning leave anyway. If he left - he would get 8% of his earnings for the current year +/- any leave he had taken in advance. If another anniversary year rolls over - then he would receive another years entitlement - which you would be liable to pay.

  • Dee2016's avatar
    Dee2016
    Cover User
    6 years ago

    Hi Jennie,

     

    Thank you so much for replying to my post!  Your explanation that the employee is still accruing leave at his ordinary hours per week makes sense to me.

     

    I am using MYOB Essentials Payroll and, as you've probably guessed, I didn't realise that I should have been recording the unworked time as unpaid leave.  Should I retrospectively enter the employee's unpaid leave hours for each week that this has being going on?  If so, can I do this without having to cancel the other employees' pays?  Or is it a case of going back, deleting everything, and re-entering everything correctly?

     

    Other questions that spring to mind are:

    Does what I ought to do have any impact on the PAYE returns I've already submitted?

    Does PAYDAY FILING have any effect on what I ought to do?

     

    Any advice/instructions you can give me on how I actually go about fixing my errors would be greatly appreciated, Jennie.

     

    Kind regards,

    Dee

     

     

    • Steven_M's avatar
      Steven_M
      Former Staff
      6 years ago

      Hi Dee2016 

       

      MYOB Essentials is a little bit different in terms of average weekly earnings and unpaid leave.

       

      Generally, if an employee did not work for whatever reasons you wouldn't enter a pay for that employee. As the Average weekly earnings is based on the gross earnings for the 12 months since the date of the start of the pay period as you are not processing pay for them you are losing weeks at the top end. For example say I paid my employee $500 for one week and then for the next 51 weeks I paid them $100, the gross earnings for the 53 week would only be based on the 51 weeks of $100.

       

      In most cases. if you have not paid the employee then you would need to file anything to the IRD for this be it through PAYE purposes or Payday filing.