Paying out Final Pay

[anniep]

Hi

I am needing to pay out a final pay to an employee who has been with us less than a year.

He started 18/08/14 worked 7 weeks and earned gross earnings of $9750. Since then he has been on ACC for a non related work injury. We have an annual shutdown period at XMAS and MYOB rolls over accrued leave to AL. He was not paid out any leave at this time. He has decided to resign and now i need to pay him out . Depart of Labour have said we only need to pay out 8% of his gross wages as he worked less than a year , however MYOB calculates out the AL to 52Hrs $1560 + HP $124.80.

Which is correct and if only the 8% of gross is owed how do i go about adjusting ?

Many thanks !!!

[Steven_M · Accepted solution]

Hi @anniep 

Due to the fact that have had an anniversary rollover (I would assume a common one), it does complicate your enquiry at little bit. However if you take it back to what you have been instructed to do by the Department Labour you should be fine. So you have been instructed to pay out the employee's holiday pay i.e. 8% of their gross since they have worked for the business less than 12 months.

Firstly you would need to work out the gross amount that the employee has worked. In order to do so I would run the Reports>>Period Reports>>By Employee/Pay Code (Summary) for that particular employee for all pay codes for the employee's time at the business.  If you preview this report it will give you a total (see the last page of the report) for Gross Earnings.  You would then take 8% of that to give you the amount of holiday pay that you have to pay the employee. 

Once you have that value you would go to Maintenance>>Maintain Pay Codes>>Select the HP/Holiday Pay pay code>> On the right hand side select "Allow rate to Modified when entering pay details". You would then go to Prepare Pays>>Enter Pays>>Select the employee. You would then enter a 1 in the Quantity and in the rate you would enter the holiday pay amount (i.e. 8% of the gross amount). After you have done that you would process the pay as per normal.

You would also just need to do some tidy up on the employee's record. After that pay has been processed you would go to Maintenance>>Maintain Employees>>Select the employee. In the Leave Details tab, you would need to zero out the Holiday Pay value and remove the value that is appearing in Annual Leave due as at. This will allow you to enter a Finish Date and if required a Reason for leaving on the Employment Details tab.

Please note you would need to make sure that you have processed all the employee's hours out. For example you have paid out all the Ordinary hours out of the employee, any Lieu day out. So if you have some these, process a payroll transaction with them and then process the holiday pay pay for the employee.

On another note when you are paying ACC, which you may have already done but its worth mentioning. Do make sure for any subsequent weeks, while on ACC you put the employee's hours against the Unpaid Leave pay code UNPDLV (to record the unpaid leave) and also put a 1 against the UNPDLVEX  pay code. This will decrease the divisor only for the calculation of the Annual Leave and it will not change the way annual leave is normally calculated which is at the greater of the Ordinary Weekly pay or the Average Weekly earnings.