To calculate vacation and sick pay in Payroll

• Vacation and Sick accrue when you process payroll in Time Card Entry, and updates when printing checks 
• Sage recommends for a terminated employee to print the final check first, then print a separate check for the vacation hours accrued
• The formula is based on an (hourly rate) x (hours worked)

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

Formulas

• (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 is 40. Therefore Regular full-time hours in a year is 2080 (40 hours x 52 weeks).

• 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

Hours an employee works in a pay period is less than the full amount

• The rate per hour for vacation is multiplied by the actual hours worked. You earn the full 40 vacation hours only if overtime counts and you make up any missed regular hours
• See PR, Utilities, Maintain Payroll Parameters to check box to accrue vacation on overtime

How to setup vacation or sick pay in Payroll
How to accrue vacation for commission employees

For non-standard work weeks, or other non-traditional calculations 

• Manually calculate vacation and sick pay in Payroll
• How to setup vacation or sick pay in Payroll or How to accrue vacation for commission employees