Set up Holidays

This guide covers how to set up and configure holidays in paiyroll®.

Overview

The principle is that pay received by a worker while they are on holiday should reflect what they would have earned if they had been working.

Holiday schemes provide a rich way of capturing most types of holiday arrangements.

Different working patterns are supported as shown below:

Working patterns

Work pattern	Fixed	Variable	No
Description	Fixed pay and fixed hours	Variable pay (regular overtime, commission or bonuses)	No fixed hours (casual work, zero-hours contract, irregular)
Holiday pay	No	Yes	Yes
Entitlement (set on employee Pay Item input)	Annual entitlement	Annual entitlement	Entitlement earned - calculated and updated after payrun approval
Remaining this year	Annual entitlement + (Carried over + Bought - Sold) - Approved bookings	Annual entitlement + (Carried over + Bought - Sold) - Approved bookings	Entitlement earned + (Carried over + Bought - Sold) - Approved bookings
Entitlement year to date	Displayed after payrun approval for information	Displayed after payrun approval for information	–

The following are common to all working patterns:

Holiday common

Reset date (Year starting)	This date (day and month) is rolled forward each year and is used to reset the holidays. Alternatively, if the special ZERO date 01/01/0001 is entered, then each workers start date is used as their own unique reset date.
Holiday taken before import to be used in the first holiday year	Set on Migrated taken input (auto cleared on next pay run).
Entering entitlement after import	Enter full annual entitlement
Pay out on leaving	Automatically
Pay out on holiday anniversary date	Automatically subject to scheme sell limit
Carried over, Bought and Sold	Displayed if scheme limits are not zero

The days that are bookable can be specified as follows:

• Use the working days as set on each employee record, where public holidays and weekends do not count in the holiday allowance.

• Use the working days as set on each employee record, but ignore public holidays so these count as a booked days.

• Specify that any number of days can be booked per week and that public holidays and weekends are ignored. The fixed number allows the system to convert from weeks to days. For example ‘5’ means that any number of days can be booked 5 days equals 1-week but for holiday payout.

Display and reports

All days, dates and durations listed above are displayed when the holiday request is first created on the mobile view. The same information is then available when a request is approved by a manager or administrator,

The Pre-approval summary2 report Holiday entitlements tab includes the full holiday report.

Step-by-step set up

Here are the steps to set up holiday:

1. First, you will need to determine which Pay Definitions contribute to holiday pay. To do this you will need to categorise every Pay Definition and whether it forms part of holiday pay. You will have 2 lists, those included in Holiday pay and those excluded:

   • Included

   • Excluded

   Salary based items are always included.

2. By default payment Pay Definitions are set to contribute to holidayable earnings and are by default included. That means the Output on the Pay Definition is checked (a tick mark) for the Holidayable earnings Buss.

   Remove Pay definition outputs from the Holidayable earnings buss for any category of Pay Definitions that should be excluded from holiday pay. This is done by editing each Pay Definition and un-ticking (clearing the checkmark) for the output which connects to the Holidayable earnings. Once complete, the system will automatically maintain the history of all included values on the holidayable earnings buss.

3. The next step is to add a Holiday Pay Definition scheme. Add a Pay Definition using the Holiday scheme Pay Template. Set the Inputs according to your scheme:

   • Reset date is the holiday anniversary date. This is used for Fixed work pattern but not for No work pattern.

   • Working pattern should be set to Fixed for salary-based employees and No for zero-hour contract workers

   • Carry limit can be used to limit how many unused days can be carried over

   • If you operate a holiday buy/sell arrangement, then Buy limit and Sell limit can be used to limit the number of days bought or sold in a holiday year. Simply set to zero if not used

   • Average formula is normally set to All for fixed employees and Only paid w1 (only paid weekly) for workers with no fixed pattern

   • Average period weeks defined how many weeks should be used for averaging weekly pay. 52 weeks is the default

   • Max history weeks is normally set to 104 weeks to comply with the new holiday pay law.

   Note

   If you have different types of workers, then you can set up as many schemes as required.

4. Attach a Holiday Pay Item to each worker using the Pay Item editor:

   • Select the holiday Pay Definition created above for the frequency required (e.g. m1 or w1) and click Create to add a Pay Item to each worker

   • Click Update to confirm the change

   • In the row for the newly added Pay Item, set the Annual entitlement to the number of holiday days e.g. 28

   • Set the Migrated balance to migrate one-time values of holiday position up to the first payrun where holiday will be operated in paiyroll®. Carried over days are positive (+) while taken days are negative (-). After the pay run the values are cleared. If you make a mistake you can re-enter a migrated value for a future pay run.

   • Set the Bur or sell Set to zero unless you operate holiday buy or sell where you will enter the number of holidays bought or sold.

   • Set the Scheme to the scheme defined earlier

   • Click Update to save these changes

Operation

Holiday operates as follows:

• Holidays are booked and approved using a holiday workflow thereby recording the start, end and holiday duration.

• All repeating Pay Items (based on Salary Pay Template) continue to output ‘pay’ during any holiday.

• Non-repeating Pay Items that are likely to decrease, will be compensated by holiday pay. This is automatically calculated and provided by the Holiday Pay Item.

• Excluded Pay Items are by definition excluded.

• Unused holiday pay is paid out on leaving or at holiday anniversary for employees on a Fixed working pattern.

Examples

Below are examples of how holiday works for different types of employees.

• A salaried employee with a Fixed work pattern and fixed salary books a 10 day holiday. In this case, no additional holiday pay will be added by the holiday Pay Item. The holiday balance will decrease to 18 days.

• A sales worker who earns salary and Variable commission takes a 2-week holiday and is unable to earn full commission during their holiday. Although their salary will be paid normally during the holiday, the holiday pay item will contribute an average commission value to reflect what they would have earned if they had been working.

• A zero-hour contract worker (No work pattern) books a holiday. During the holiday they will normally not receive any pay from other Pay Items. The Holiday Pay Item will look back over 104 weeks of history and find 52 paid weeks of pay. All values will then used to determine an average weekly pay figure. The conversion of 1 week to days depends upon the number of employees working days and the days the holiday was booked for. An employee who works 5 days per week (Mon-Fri) and who takes 2 weekday holidays will, therefore, earn holiday of 0.4 x weekly pay.