Are your Leave Entitlements set up correctly?

 

Most employees are entitled to a certain number of days of annual leave, personal leave (such as sick leave) and other forms of leave that they can take during the year. If you’re unsure what leave your employees are entitled to, the FairWork website is a good place to start.  Bear in mind that Australia has one of the the most complex Employment Award systems in the world.

 

In MYOB AccountRight you track the hours and days they are entitled to take, using entitlement categories. When paying out the entitlement, you’ll use a wage category (whether the employee is hourly or salary based). The hours you enter against the wage category will automatically offset the entitlement balance owing to the employee.

In the example above, the employee has taken 7.6 hours of annual leave during the pay period. The Annual Leave Accrual entitlement category in MYOB Accountright shows the number of hours the employee has accrued over the pay period. At any time, you can also view an employee’s entitlement balances.

 

Set up an entitlement category

 

1. Go to the Payroll command centre and click Payroll Categories.
2. Click the Entitlements
3. If the entitlement you want to set up already exists, open the category. Otherwise, click New and give the entitlement a name.
4. Set up how you want to calculate the accrual of entitlement hours. You have three options:

User-Entered: If you want to enter the hours to accrue in each employee’s standard pay, or manually enter hours accrued when recording the pays, select the User-Entered Amount per Pay Period option.

Percentage: If your employees are paid on an hourly basis, select the Equals [x] Percent of option.

Select who the entitlement applies to:

 

5. Click Employee and select all employees who are entitled to this leave, and to whom the rate or percentage you’ve entered applies.

If you have:

 

• entered a percentage, only select employees who are paid hourly
• entered a fixed rate, only select salaried employees.
• chosen to enter a user-entered amount, select all the employees for whom you’ve specified entitlement hours in their standard pays.

 

To record leave taken

• When processing a pay run (Payroll command centre > Process Payroll > Employee Pays step), open the employee’s pay and enter the hours taken during the pay period in the Hours column of the wage category as a positive amount (if you use timesheets to track leave hours, the hours will be filled in for you).

 

 

Click the arrow that’s next to the leave’s wage category. Here you can enter some notes about the leave that was taken. You can also enter the start and end date for the leave taken in the period (but if the employee took several non-consecutive days, just note down the details in the Notes field).

 

Determine the dollar value of your leave accruals

 

At times business which to record dollar value of leave accruals in their balance sheets or use them for budgeting purposes. To view the current dollar value of your existing accrued leave balances run the Entitlement Balance Summary report.

 

1. Go to the Reports menu and choose Index to Reports.
2. Click the Payroll
3. Under the Entitlements heading, select Balance Summary.
4. Select the period for the report in the Dated From and To
5. Click Advanced Filters.
6. Select the appropriate Employees.
7. In the Display by field, select either Employee or Entitlement.
8. Click Run Report. to determine the current dollar value of your employees’ leave.

 

Here’s an example:

The information provided here is of a general nature for Australia and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.