Vacation payment - Short version

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Vacation payment - Short version

Introduction

This chapter is designed to help you follow the procedure to pay out, on an annual basis, an employee's year-to-date vacation balance.

 

hmtoggle_plus1Annual payment of the year-to-date vacation balance

Access:

Enter pay: Payroll > Data Entry >Pay and adjustments > Enter pay

Separate payment: Payroll > Data Entry > Pay and adjustments > Separate payments

Warning If you use the current pay, go to step 2 immediately.

1If you make a separate payment: select "same pay period" from the drop-down list of the Type field if you want to enter the payment in the current period or "Another pay period" if you want to enter the payment in another pay period. If you have selected “Another pay period,” select the pay period to which the payment must be applied from the Period field.

Warning It is recommended that the year-to-date vacation balance (not taken) be paid on the same record as the current pay to ensure that the amounts paid for taxes are accurate.

2Verify the balance in the vacation bank by clicking the Banks hyperlink in the employee identification banner. Drag your mouse over the Info icon to obtain the balance and the balance leave calculation formulas.

3Under the Enter payments and adjustments (or Add a separate payment) heading, click the Add a payment or an adjustment.

4From the Type column dropdown list, select “Payment”. From there, select the earnings corresponding to the vacation bank using the dropdown list located under the
Earning / deduction field.

5If an employee is absent from work :

a.Enter the amount to be paid in the Amount field. Also, in the Quantity field, enter the number of Employment Insurance insurable hours and then select “Paid/taken” from the drop-down list under the Absence column.

b.By default, the system will display the dates corresponding to the current period in the Start and End fields. Verify if the dates match the employee’s vacation period.

Warning If you want to pay an amount that is greater than the vacation bank balance, select “Anticipated” from the dropdown list.

c.Enter the amount to be paid in the Amount field and leave the Quantity field blank because the hours are not insurable. Select “Paid/not taken” from the drop-down list under the Absence column.

6Click on Save to save your changes and complete the procedure.
hmtoggle_plus1Paying the vacation year-to-date balance at leave

Access :

Enter pay: Pay > Data Entry > Pay and adjustments > Enter pay

Things to remember

Note that if the payroll province is Quebec, British-Columbia, Alberta, Saskatchewan, Newfoundland and Labrador or if the company is governed under a federal chart, the Act respecting labour standards and the Canada Labour Code applicable laws require from an employer, when paying a termination pay that includes a “Vacation owed” to an employee, that he calculates a vacation percentage on the amount of “Vacation owed”.

As for payroll processing, this norm is only to be applied to vacation banks with an amount of “Vacation owed”.

In order to comply with this government requirement, the payment of the vacation percentage on the amount of “Vacation owed” is automated in our payroll system when an employee is terminated. This automation will be according to the employee’s vacation percentage. In short, you do not need to calculate by hand the percentage on the amount “due”.

1Verify the balance in the vacation bank by clicking the Banks hyperlink in the employee identification banner.

2Click the Add a payment or an adjustment under the Enter payments and adjustments heading and select the earnings code “G305 VACATION” to pay the remaining vacation entitlement.
The fields will auto-populate. Never enter an amount.

3Select the “Paid/termination” option.

4Click on Save to save your changes and complete the procedure.