Changes to Holiday Pay calculations

Changes to Holiday Pay calculations

Holiday Pay by hour or by day can now be set at the Pay group level

Employees take holidays in either days or hours. Flexipay therefore needs to know how to calculate the Holiday pay rate appropriate to the Employee. Prior to version, this preference was set for each individual Employee.

A new tab has been introduced in the Modify payroll group window labelled Holiday pay. On this tab, you can now specify whether an entire Pay group is calculated in hours, days, or using each Employee's preference. 

Open the Modify payroll group window by opening the System menu in the Flexipay toolbar, and clicking Maintain pay groups. A window will pop up, where you need to choose the Pay group you wish to change, and then click Modify. The Modify pay group window will open, which has a new tab labelled Holiday pay (keyboard shortcut alt+H). 

There is a section in this tab labelled Calculate holiday pay in. Use the radio buttons to select your preferred method of calculating Holiday pay for this Pay group:

Weeks not worked in Holiday Pay calculation

When calculating Holiday payFlexipay takes an average of the last 52 weeks pay to produce an Average holiday pay value. Flexipay has the functionality to count weeks that have not been worked in order to go back further through the Employee's history than the normal 52 weeks. This is to handle situations where an Employee is paid different amounts each pay period, which could affect their average. For example, they may have received a period of SSP which would have brought their average Holiday pay down.

Prior to version, you would have been manually setting weeks not worked for Employees when they have had Statutory payments. A new checkbox has been introduced on the Holiday pay tab of the Modify payroll group window that will enable you to automatically count weeks with Statutory absences as weeks not worked.

Note: Mitrefinch strongly recommend the use of this feature, which will significantly reduce the amount of time you need to spend manually altering the Holiday pay information for Employees. Any new Pay groups that are created will automatically have this feature enabled.

In the new Holiday pay tab of the Modify payroll group, a new checkbox has been added labelled Add statutory absence to weeks not worked. Tick this box to enable this new feature:

The upgrade for will not automatically enable this new feature. Enabling this feature in situations where you have manually entered Weeks not worked for periods of Statutory payments would cause the Holiday pay calculation to count these periods twice. To prevent this issue, you can use the From date to cause the automatic calculation to ignore dates prior to the one specified. Click on the From date field to use the date picker and choose a date. If you have already been using Holiday pay calculations, a good idea would be to set the From date to the next pay period where you have not yet manually entered weeks not worked - from that point forward, you should not enter Weeks not worked manually for Statutory payments (you will still need to manually enter them for things like unpaid leave).

You can also provide a date to start using this feature from using the From date date picker. If you have already been using the Holiday pay feature, manually setting weeks not worked, you can set the From date to the date of your upgrade to Flexipay version to automatically count weeks with Statutory payments from this point onwards. Using a From date means you do not need to correct Archive history.

Note: if you leave the From date blank, weeks not worked will be calculated over the whole period of Holiday pay.

To view these changes in action, you can easily set up a custom Display view to view the relevant Employee fields and see them change when this box is ticked. Click here to see an example of how to do this.

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