Once the setup of vacations is completed, standard tasks related to vacations include updating of vacation accruals and processing employee requests for vacations.

Accruing Vacation Days and Accumulating Vacation Pay

Generally, automatic calculation of accrued vacation days can be performed within the Month-End Closing process if you select the Calculate Accumulated Vacation Pay option on the Accounting > Service Tools > Month-End Closing form and run the service tool. Also, for employees for whom accumulation of vacation pay is required in their contracts, the amount of vacation pay will be accumulated. The resulting values of available vacation days and amounts of accumulated vacation pay will be listed in the Calculations of Accumulated Vacation Pay documents generated automatically by the Month-End Closing service tool.

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:

Table 2. Accumulation of Vacation Pay at month end

For information on calculation of Average Daily Salary amount see the Parameters for Average Daily Earning Calculation section in the Setup of Vacations.

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.

You can create such documents using the following form: HR and Payroll > Payroll Documents > Calculations of Accumulated Vacation Pay.

If you don't want this document to be updated by the Month-End Closing service tool running in the same month, make sure the Manual Filling check box on the Accumulated Vacation Pay tab is selected.

Processing Leave Requests for Vacations

To register employee requests for annual vacations, main or additional, you can use the following documents: HR and Payroll  > Time Tracking Documents > Leave Requests.

Documents of this type are available if the Enable Leave Requests option is selected on the Administration > Settings > HR and Payroll form.

Employees can create Leave Requests (with Vacation selected as leave type) for themselves if they have appropriate access rights. They can specify the types of requested vacations, the dates of these vacations, and post the documents. For more details, refer to Creating a Leave Request.

Processing Vacations

To register a vacation or compensation for unused vacation days, you can use the following documents: HR and Payroll  > Time Tracking Documents > Vacations. Vacations can be created manually or can be generated as based on the appropriate Leave Requests.

If the employee is going to actually use vacation days as a leave, create a new Vacation document and select Vacation Calculation as the transaction type, specify the types and dates of vacations, and click the Calculate button on the toolbar. For more details, refer to Creating a Vacation. 

Vacation payout is a sum of vacation payout for Main vacation and payout for additional vacation (if such vacation was requested). Each part is calculated as Average Daily Earning multiplied by the requested number of vacation days.

The calculation of Average Daily Earning is based on the vacation type definition and uses the values specific to the employee that either are listed in the Employment Contract or available as the data from the Payroll Calculations.

On the Basic Accruals tab, you can view the basis for vacation pay calculation.

Using the Vacation Pay tab, you can view the accumulated amounts of vacation pay for main vacation and specify whether the vacation payout should be paid entirely from the accumulated amount or partially from the accumulated amount and partially from the appropriate expense GL account (by default, the Employee Benefit Expenses GL account).

Using the Additional Vacations tab, you can view the amount or amounts to be paid for additional vacation(s) and the basis for this calculation; also, you can decide what part of the pay should be made from the amounts accumulated for these additional vacation(s).

After reviewing the calculated vacation payout, accumulated vacation pay with all the details of calculation, you can save and post the document.

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).

If your organization pays to employees using WPS (the Wages Protection system), then a WPS file will be created based on the current Payroll Sheet.

For more information, refer to Overview of WPS file processing.

To generate a payslip for one employee or payslips to multiple employees, you can use the following report: HR and Payroll > Reports > Payslip.

Adjustments to Accumulated Vacation Pay

Employees can use the accumulated amounts of vacation pay for loan repayment. For this, you can create an Employee Benefit Provision Adjustment document with the Loan Repayment from Accumulated Vacation Pay transaction type.

You can repay the employee's loan with the entire amount of accumulated vacation pay or you can enter any lesser amount manually.

If you need to write off the accumulated vacation pay for employees who quitted without terminating their employment contracts, create such adjustments with the Reset Accumulation of Vacation Pay transaction type and write off the accumulated amounts to income.

Vacation Pay on Termination

In case an employee quits the job at will (or is laid off, or is fired), you create a new document using the form: HR and Payroll > Human Resources Documents > Terminations.

For this document with the specified employee and the date of termination, the application automatically calculates the pay for accrued but unused (on the termination date) vacation days which will be included in the final pay. The unused amount of accumulated vacation pay (if any) will be written off to income.

Related reports

The reports in the HR and Payroll module provide detailed information on available vacations and amounts of accumulated vacation pay. To view these reports listed alphabetically, click HR and Payroll > Reports of HR and Payroll.

You can track the available vacation days accrued by any employees using the Available Vacation Days report. You can view the accumulated vacation pay amounts by using the Balances of Accumulated Vacation Pay and Statement of Accumulated Pay reports.

You can use the Payslip report to print payslips to inform each employee about the paid amounts.