Proportional Accrual

Payroll | Leave Setup

Summary

This method is recommend for employees who's days/hours worked frequently change. This method, accumulates incrementally each pay.

Proportional accruals occur in Standard and Manual pays.

Using this method, employees accrue annual leave units in proportion to the number of units they actually work. For example, if an employee is entitled to 8% of their gross earnings for annual leave, then they will be entitled to 8% of the units that they work.

Scenario

An employee's annual leave entitlement is 4 weeks.

If this employee works 4 days per week, proportional accrual calculates:

4 days x 4 / 52 = 0.3077 days (weekly entitlement)
0.3077 days x 52 weeks = 16.0004 days (yearly entitlement).

If this employee works 36 hours per week, proportional accrual calculates:

36 hours x 4 / 52 = 2.7692 hours (weekly entitlement)
2.7692 hours x 52 weeks = 143.9984 hours (yearly entitlement).

Used for

This method of unit accrual is available for:

Annual leave tables
Sick leave tables
Long service leave tables

Procedure

To calculate the total accrued units for the current leave period when Method of unit accrual = Prop:

Step	Details
1.	Determine whether the employee accrues in hours or days (Refer to Entitlement Unit on the Annual leave table Setup tab)
2.	Determine the hours/days worked for the pay being processed If days - PayGlobal uses the Days Worked from the Pay Header record If hours - PayGlobal sums the allowance transaction quantities for allowances of type: H, R, L, S, O & V where the flag Include in Annual Leave = Yes. Also referred to as the Maximum Qualifying Hours.
3.	Determine is having an AL anniversary and is not terminating this pay, i.e. annual leave rollover. Rolling Determine the proportion of the pay period prior to rollover. Number of days before rollover / Number of days in the pay period. e.g. If the fortnightly pay period was was 1st July to 14th July and the employee's annual leave end date was 5th July, then the formula is 5/14 = 0.3571 Not rolling No apportionment is made.
4.	Calculate the maximum units that can be accrued for the pay period, by multiplying the Maximum units accrued per week as entered in Leave \| Setup by the period factor (1 for weekly, 2 for fortnightly, 2.166666 for twice monthly, 4.33333 for monthly): Maximum units accrued per week * Period factor
5.	Calculate the current pay period accrual by multiplying the Accrual rate per pay period (as entered in the Leave \| Setup tab by the units accrued in the current pay (such as hour or days worked): Accrual rate per pay period * Units in current pay This uses the actual days recorded in the transaction entry for the current pay. For this accrual to be accurate, if the entitlement units are being maintained as days, the user should maintain the allowance and deduction earnings and the days worked.
6.	Derive the lesser of the maximum units accrued per period (step 4) and the current pay period accrual (step 5). Note: If maximum units are zero, the current pay period accrual is used.
7.	Calculate the accrued units this pay: Rolling The accrual is apportioned into pre-rollover and post rollover values with the pre-rollover amount going into outstanding/entitled units. Pre-rollover = Accrued units this pay (step 6) * Pre-rollover proportion (step 3). Post-rollover = Accrued units this pay (step 6) - Pre-rollover value Note: This proportional split occurs for all annual leave unit accrual methods and for New Zealand and Fiji databases, it will also split any extra week accrual values based on the equivalent balances on the Extra Week tab Not rolling Use units from step 6

Long Service Leave

If the long service leave end date is less than or equal to the period end date, then Proportion = 1.0000.

If the long service leave end date is greater than the period end date, then Proportion =

1.0000 minus ((Days between long service leave end date and the period end date) / (Days in long service leave period minus long service leave days adjusted))

The number of days in the long service leave period is the number of years, such as 10, multiplied by 365.25.

Example:
Long service leave end date: 01/05/2010
Period end date: 01/05/2009
Long service leave table: 10 years
Long service leave days adjusted: 0
Proportion: 1.0000 - (365 / (3652.5 - 0)) = 0.9000