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For each employee, accrual of vacation days for each year starts from the date of employment. The process will calculate the vacation days added each month for each employee as follows:

      Vac_Days_per_Year/12.

For employees with accumulation of vacation pay, the Month-End Closing process will generate the following journal entries:

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For a newly hired employee, accruing of the vacation days and accumulation of vacation pay is not performed during the initial period of employment when the employee has no right for vacations, for instance, in UAE the employees can have vacation only when their length of service exceeds six months. Then, during the month-end closing for 6th month, the application credits the employee record with the following number of vacation days:

     Vac_Days_per_Year *6/12

For example, a newly hired employee Marat can request a paid vacation starting his 7th month of employment. When the 6th month of employment ends, Marat will have 12 days of paid vacation. If he asked for accumulation of his vacation pay in the employment contract, the accumulated amount will match 12 days of paid vacation. If he requests vacation after his 11 months of employment, he will get 22 paid days; however, after completing 13 months, he is entitled to 32.5 days of paid vacations, that is, 30 days for the first year and 2.5= 30/12 days for the 13th month.

Note. Any remaining balances of vacation days are moved to the following year.

Manual calculation of accumulated vacation pay and available days

Alternatively, you can create Calculations of Accumulated Vacation Pay documents manually and include only the employees currently of interest.

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Note. The posted Vacation documents will provide the data on corresponding "leave of absence" days in Time Sheets if when creating a new Time Sheet you will select to populate the time sheet by using the Fill by all documents option.

Vacation Compensation

When you need to pay the employee for not using some number of earned vacation days of the main vacation, or additional vacations, or both, you create documents of the Vacation type with the Vacation Compensation transaction type. You can specify what part of the compensation pay should be paid from the accumulated vacation pay and what part should be recorded as current expenses. On document posting, the compensated vacation days will be recorded as used days thus reducing the number of available vacation days.

If according to the organization's policy, accrued vacation days that were unused during the current year of service, should be reimbursed, you also can use the Vacation Compensation transaction type. For more details, refer to Creating a Vacation.

Paying to Employees

To actually create a payment to the employee, you will need to generate a Payroll Sheet and then generate a payment according to the selected payment method: Cash Payment, Cheque, or Bank Payment (direct deposit to the employee's bank account).

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