Overview
This article will explain the Salaried Holiday Accrual functionality and how to enable it in the Wage Function Setting. The Wage Function Setting determines how the Rota wage cost is calculated and is only available on the Admin (master) login.
This setting is to add an accrual and to remove the cost of a salaried employee when they are on holiday, enabling the location to cover the employee without increasing their operational wage costs.
Holiday will still need to be accounted for manually on the P&L and actual holiday moved to the balance sheet.
How it Works
The Rota will calculate the weekly cost of the salaried employee (salary divided by 52).
The Rota global setting will determine how this weekly cost is split across the week.
The examples below show the daily rate and accrual cost for the two different settings.
Fig.2 - Actual Days Worked
When an employee has holiday that has been input through the HR module, the system will remove the cost for that day. The cost for the week will vary depending on the rota setting.
Fig.3 - 7 day split
Fig.4 - 5 days (days actually worked)
Reconciling Payroll
Configuration
To reconcile payroll, holiday will need to be split out on the payslips. This will then display on the super journal.
A new Calculated Payment Type will need to be created. A Fourth Payroll Specialist can give access to this if needed.
Fig.5 - Payment Type Configuration
A global setting in Payroll will also need to be changed.
Fig.6 - Global settings
Process
The Holiday Accrual figure will display on the Analysis page and should be manually accounted for on the P&L. This is the holiday ‘Pot’.
When holiday is taken, the cost of the holiday will be displayed on the Super Journal and the cost can be transferred from the P&L to the balance sheet, effectively reducing the pot.
Calculation when Splitting Across 7 Days
When the salary is split over seven days, the day rate may be lower than expected. See system calculation below.
Example
An employee has a salary of £30,000 and works 5 days a week.
Rota weekly cost = £576.92
Rota Day rate = £82.42
This is not the actual cost of the day as the employee would not be working seven days a week. It is designed to spread the cost evenly, effectively lowering the day rate but with the weekly cost correct.
Accrual is (weekly cost) x 12.07% = £69.63
Actual Day rate
Wage Function Setting
Fig.7 - Wage Function Setting
Fig.9 - Holiday Accrual Percentage
This article will explain the Salaried Holiday Accrual functionality and how to enable it in the Wage Function Setting. The Wage Function Setting determines how the Rota wage cost is calculated and is only available on the Admin (master) login.
This setting is to add an accrual and to remove the cost of a salaried employee when they are on holiday, enabling the location to cover the employee without increasing their operational wage costs.
Holiday will still need to be accounted for manually on the P&L and actual holiday moved to the balance sheet.
How it Works
The Rota will calculate the weekly cost of the salaried employee (salary divided by 52).
The Rota global setting will determine how this weekly cost is split across the week.
- Go to Rotas > Administration > Global Settings
-
Find the setting - Use salaried employees actual days worked to calculate salary
- If set to No – The weekly cost will be split across seven days (recommended)
- If set to Yes – The weekly cost will be split across the number of days the employee is scheduled on the Rota
- To change this setting, select Edit against Rota Settings at the top of the screen and tick/un-tick the relevant box
- Select Save (at the bottom) when done
The examples below show the daily rate and accrual cost for the two different settings.
Fig.1 - 7 days
Fig.2 - Actual Days Worked
When an employee has holiday that has been input through the HR module, the system will remove the cost for that day. The cost for the week will vary depending on the rota setting.
Fig.3 - 7 day split
Fig.4 - 5 days (days actually worked)
Reconciling Payroll
Configuration
To reconcile payroll, holiday will need to be split out on the payslips. This will then display on the super journal.
A new Calculated Payment Type will need to be created. A Fourth Payroll Specialist can give access to this if needed.
- Go to Payroll > Administration > Payment Types > Add New Calculated Payment Type
- The new Calculated Payment Type should be configured as shown in Fig.5
Fig.5 - Payment Type Configuration
A global setting in Payroll will also need to be changed.
- Go to Payroll > Administration > Global settings > Holiday Pay
- Apply settings as shown in Fig.6
Fig.6 - Global settings
Process
- Access the Rotas module and select a rota
- Select the Analysis button
The Holiday Accrual figure will display on the Analysis page and should be manually accounted for on the P&L. This is the holiday ‘Pot’.
When holiday is taken, the cost of the holiday will be displayed on the Super Journal and the cost can be transferred from the P&L to the balance sheet, effectively reducing the pot.
Calculation when Splitting Across 7 Days
When the salary is split over seven days, the day rate may be lower than expected. See system calculation below.
Example
An employee has a salary of £30,000 and works 5 days a week.
Rota weekly cost = £576.92
Rota Day rate = £82.42
This is not the actual cost of the day as the employee would not be working seven days a week. It is designed to spread the cost evenly, effectively lowering the day rate but with the weekly cost correct.
Accrual is (weekly cost) x 12.07% = £69.63
- The employee will be scheduled for 46.4 weeks as they will take 5.6 weeks holiday a year
- The annual cost calculated on the rota will be (weekly accrual) x 46.4 (52-5.6 weeks) = £3230.77
- This ‘Pot’ divided by the number of days taken (28) = holiday rate of £115.38 per day
- This Holiday Day rate will match the Actual cost of the employee on the Super Journal
Actual Day rate
(£30,000 ÷ 52)
£576.92 ÷ 5 = £115.38
Or
£30,000 ÷ 260 = £115.38
£30,000 ÷ 260 = £115.38
Wage Function Setting
- To configure the Wage Function Setting, go to Rotas > Administration > Wage Function Setting
- To enable the Holiday Accrual functionality, tick the boxes Hols Accr. column for Managers Lent, Managers Borrowed and Salaried Total Pay - see Fig.7
Fig.7 - Wage Function Setting
- In the Calculated Values section, tick the boxes against Holiday Accruals (based on %) for Wage Cost and Display
-
Choose a calculated order by selecting a number from the Cal. Order drop-down
-
The Calculated Order will determine in what order the system will calculate holiday accrual in terms of the Employer's NI and other accrual
When set to:- 1 - Holiday Accrual will be calculated on basic pay only
- 2 - Holiday Accrual will be calculated on basic pay and elements set to 1
- 3 - Holiday Accrual will be calculated on basic pay and elements set to 1 & 2
-
The Calculated Order will determine in what order the system will calculate holiday accrual in terms of the Employer's NI and other accrual
- Type a Label in the provided field
Fig.8 - Calculated Values
- Ensure the Holiday Accrual % is correct (found under the Display Costs heading)
- A recommended percentage would be 12.07% as this is the rate that holiday is accrued
- Select Save
Fig.9 - Holiday Accrual Percentage
With these settings in place, the system will calculate the accrual for the week based on the percentage entered in the Wage Function Setting and divide this cost according to the Use salaried employees actual days worked to calculate salary setting.
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