Paying out Holiday Pay when Annual Leave taken

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Contributing User Barbarabcp
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Paying out Holiday Pay when Annual Leave taken

Hi after a disastrous end of year pay last year I need to get this right.

 

We do a close down and pay the guys out their holiday pay however it does not take into account any annual leave taken during the year. I did so many calculations and reversals last year when I figured it was all wrong.

 

The guys annual leave due still has a figure in as at the closedown last year, should I have made it 0 to start a new year?

 

Their gross earnings are correct but the % figure is so wrong, even negative for an employee. Do I manually adjust the Holiday due figure so I can pay the correct amount next year?

 

Should I be looking at their 8% of gross less any annual leave taken to manually adjust the pay I do for close off next week?

 

I fear my boss hasn't the confidence in me so please help. I do MYOB Payroll for two other businesses who do not do a closedown and that is so much easier.

 

Barbara

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Ultimate Partner jenniek
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Re: Paying out Holiday Pay when Annual Leave taken

Hi @Barbarabcp,

First of all, are your employees all setup with a common anniversary of just before the shutdown period? Are you paying out their HP as annual leave (ANHL)? - this is key to getting the payroll system to calculate correctly. You need to pay out the balance of leave required as ANHL - not HP. Never pay HP unless the person is leaving or is a casual. Technically you can't pay out all annual leave unless this period of time is being taken over the close down period. Also be aware that a small amount of leave balance will be left owing in HP as an employee earns 8% HP on any annual leave taken. This carries over to the next year.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
Ultimate Partner jenniek
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Re: Paying out Holiday Pay when Annual Leave taken

Hi again @Barbarabcp

If the gross earnings are correct, and the HP % is wrong, then correct it by overiding it - but this should be a once off correction, and is caused by paying HP instead of ANHL. What date is your common anniversary set to?

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
MYOB Moderator Steven_M
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Re: Paying out Holiday Pay when Annual Leave taken

Hi @Barbarabcp

 

Welcome to the MYOB Community Forum, I hope you find it a wealth of knowledge.

Its great to see that @jenniek has offered her assistance in regards to your enquiry.

You might also what to take a look at Managing your leave with MYOB Payroll This is a fantastic free webcast providing a quite overview of leave especially over the holiday season.

Kind regards,
Steven

MYOB Community Support

Online Help| Forum Search| my.MYOB| Download Page

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Contributing User Barbarabcp
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Re: Paying out Holiday Pay when Annual Leave taken

Hi Jennie, thanks so much for your quick reply which is what I thought it would be.

 

I did forget to say that the common anniversary was changed 2 years ago to 20th Dec and HP paid out since for the end of year close off. The years before that we were paying out whatever annual leave they had accumulated at the end of the year.

 

From here I manually adjust the AL due total to 0 I should think, then make the 8% HP due figure correct of the Gross Earnings and this is what will be paid out this year as AL.

 

Hopefully it works because some of the guys have had time off during the year and paid out AL.

 

I will have to make sure the 8% figure we pay out has the leave they have taken during the year taken off.

 

Do I have it right or have I now confused you. Clear as mud to me.

 

Barbara

 

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Ultimate Partner jenniek
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Re: Paying out Holiday Pay when Annual Leave taken

Hi Barbara,

If you paid out everything as annual leave last year, then the HP calculation should be a bit higher than just gross earnings for this year, as 8% is earned on annual leave - so that might be a bit higher and is due to your staff, so don't zero it out. If you calculate 8% of what was paid in annual leave last year, this should be what the difference left is or close to it.

What I would do before you anniversary date rollover, I would correctly calculate the gross earnings figures since the last anniversary date - correct that if necessary (I'm assuming this might be correct though - but doesn't hurt checking) -then calculate 8% of this figure and enter it into the Hol Pay total. If anyone has had annual leave in advance, there annual leave taken balance should be a negative - this is correct and will be deducted off the entitlement on the 20th.

Then once you have updated the leave on the 20th, you should be able to pay out the balance of annual leave owing - there will be no HP owing. However after this run is done, there will be 8% HP left which rolls over into next year's leave.

For someone who took leave in advance, then they might get 160hrs entitlement - but be left with say 120hrs if they took 40 hours in advance. Hope that's clear as mud.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
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