Leave liability report showing balance for Holiday pay due ($) for a terminated employee

Hi AliBright​ - thanks for providing the details.

The Annual holidays ($) and Holiday pay due ($) amounts in the Leave Liability report are separate calculations:

• Annual holidays ($) is the value of the employee’s unused annual-holiday entitlement. This is now $0.00 because the $13,230.78 owed was included in the final pay.
• Holiday pay due ($) is the report’s separate 8% holiday-pay calculation. It is based on the employee’s gross earnings for their current annual-leave entitlement year, and can also include 8% of annual or alternative holidays due.

The report is calculated using recorded pays with a pay-period end date on or before the report date. It doesn’t simply show the amount still to be paid after subtracting the final-pay amount. So, when you run the report as at 31/08 and include inactive employees, it can recalculate a Holiday pay due amount for the terminated employee even though their Annual holidays balance is zero.

This also explains why the figure changed from $9,920.00 on 27/08 to $11,245.29 on 31/08. If the final pay’s pay-period end date falls after 27/08 but on or before 31/08, that pay is included in the 31/08 report calculation but not the 27/08 calculation. The payment date of 25/08 and termination date of 28/08 don’t determine whether the pay is included—the pay-period end date does.

The $11,245.29 should therefore not be treated as an additional amount to pay the employee. It is the Holiday pay due result calculated by the report for the selected date. The $10,412.31 paid in the final pay is the final-pay calculation, while the report is a point-in-time liability calculation and does not show the final-pay amount as a separate offset in that row.

To confirm the source of the difference, check the final pay’s pay-period end date and the employee’s gross earnings included in the report up to 31/08. The figures provided here aren’t enough to identify the individual pay lines that make up the $11,245.29.

I hope this helps!

Adrian

Hi Adrian,

Thank you for your reply, though it does not help.

My question is why is the $11,245.29 balance there at all? The employee has been terminated, so shouldn't the Holiday pay due at any time after their termination date be zero?

Thank you.

Hi AliBright​ - yes, good question!

If the employee’s final pay was processed correctly and included their annual holidays owed and the 8% holiday-pay accrual, there should not be a further Holiday pay due amount outstanding after their termination date.

The $11,245.29 shown in the 31 August Leave Liability report is not an additional amount owed to the employee. It is the result of the report recalculating the Holiday pay due amount using the report’s 31 August “as at” date. The report’s calculation uses the relevant gross earnings and leave amounts for that calculation; it does not simply carry forward the $10,412.31 already paid in the final pay as a zero balance.

That is why the Annual holidays balance is now $0.00, while Holiday pay due still shows $11,245.29. The figure is a recalculated report value, not a remaining liability that should be paid again. The difference between the $10,412.31 paid in the final pay and the $11,245.29 shown in the report can’t be reconciled from the summary figures alone because it depends on the pay items and pay-period dates included in the calculation.

Regards,

Adrian