Calculate vacation and sick in payroll

• Vacation and sick hours accrue when you process payroll
• The formula is based on an (hourly rate) x (hours worked)
• Use the figures and variables in the next section to calculate the accrual

Figures and Variables

• Hours in a work week -  number of regular hours worked, excluding overtime or comp time
  1. Go to PR, then Utilities.
  2. Select Payroll Parameters.
  3. View the hours entered in the Hours in a work week field.
• Rate - Total number of hours the employee earns in a year
  1. Go to PR, Employees, Maintain Employees.
  2. Select Vacation... button to view the vacation/sick rate.
• Hours worked - The number of hours the employee will need to work to earn the vacation/sick rate

Formula

• (Hours in a work week) * (Number of weeks in a year) = Regular full-time hours in a year
• (Rate employee earns per year) / (Regular full-time hours in a year) = Rate earned per hour
• (Rate earned per hour) x (Hours worked during time card entry) = Vacation and sick earned on paycheck

How many vacation hours will an employee earn if they work a 40-hour week and earn 80 hours of vacation a year? 

• The number of hours in a work week is 40
• Regular full-time hours in a year are 2080 (40 hours x 52 weeks)
• Employee works a 40-hour week and earns 80 hours of vacation a year
  • 80 / 2080 = .03846154 rate earned per hour
  • .03846154 x 40 = 1.53846154 vacation hours earned
  • Employee earns 1.53846154 hours of vacation for 40 hours worked 

Determine vacation / sick rates for alternative calculation methods

Employee earns 1 hour (vacation or sick) for every 30 hours worked

• Rate: 1 hour
• Hours worked: 30
• Hourly rate: 1 / 30 = .033333
• Rate employee earns per year: .03333 x 2080 = 69.333
• Enter Rate of 69.333 in PR, Employees, Maintain Employees, Vacation

Employee will earn 8 hours (vacation or sick) for every 160 hours worked

• Rate:  8 hours
• Hours worked: 160
• Hourly rate: 8 / 160 = 0.05
• Rate employee earns per year: 0.05 x 2080 = 104
• Enter Rate of 104 in PR, Employees, Maintain Employees, Vacation…

Add vacation / sick rates as a lump sum

To enter vacation or sick hours as a lump sum (or front-loaded), see Add vacation or sick pay hours as a lump sum.