| The system calculates an hourly rate behind the scenes. As the employee has hours entered during the payroll process, the system calculates the hourly earned rate for sick and/or vacation pay for each hour worked. Note: Sage BusinessWorks calculates vacation and sick accruals on the standard work week specified in PR, Utilities, Maintain Payroll Parameters. For non-standard work weeks or other non-traditional calculations see How to manually calculate vacation and sick pay in Payroll or How to calculate vacation and sick pay using non-traditional calculation methods.
To calculate vacation and sick pay in Payroll: - Vacation/Sick accrues when payroll is processed through Time Card Entry, and updates when printing checks. NOTE: When an employee terminates, it is recommended to print the final pay check, then print a separate check for vacation hours accrued.
- The formula is based on an (hourly rate) x (hours worked).
- To calculate vacation and sick pay you will need these figures/variables:
Variables: - Hours in a work week = defined in PR, Utilities, Maintain Payroll Parameters
- Rate employee earns per year = Defined in PR, Employees, Maintain Employees, Vacation…, Rate
- Hours worked during time card entry = hours entered during time card entry
The Formulas are: - (Hours in a work week) x (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 (for vacation or sick)
- (Rate earned per hour) x (Hours worked during time card entry) = Vacation and Sick earned for hours worked on paycheck
Example: In this example the number of hours in a work week (found in Payroll Parameters) is 40, therefore Regular full time hours in a year is 2080 (40 hours x 52 weeks).\ - How many vacation hours are earned if an Employee worked 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 earned 1.53846154 hours of vacation after working 40 hours.
NOTE: If the number of hours an employee works during a pay period is less than the full amount, for example 40 hours, then the rate per hour for vacation is multiplied by the actual hours worked, i.e. 38. This means the accrued vacation for the year will not be the full 40 hours unless vacation is accrued on overtime and the short hours are made up. See PR, Utilities, Maintain Payroll Parameters to check box to accrue vacation on overtime.
For instructions on setting up sick pay and vacation time see How to setup vacation or sick pay in Payroll or How to accrue vacation for commission employees
[BCB:163:Chat BusinessWorks US:ECB]
|