Holiday Pay calculations workbook

The purpose of the holiday pay calculations workbook is to provide complete transparency with how the system calculates an employee's 8% (or the percentage recorded in the pay rates screen for the employee) holiday pay entitlement via the Leave Liability report. This article will provide clarification on each section of the workbook to ensure a thorough understanding of all calculations.

Firstly, you need to generate the Leave Liability report as at the desired date.  Filter out to select the date range and the employee under the employing entity.





From the screen, you will see a download icon next to the $ value of the employee's "Holiday Pay 8%" leave record, as follows:



The workbook explained

The holiday pay workbook contains several worksheets:

​

Working: this contains the complete calculation to derive the employee's 8% (or the percentage recorded in the pay rates screen for the employee) holiday pay entitlement;

Pay Runs: this lists all the relevant pay runs, if any, that encompass the employee's pay run gross earnings component of the workings; 

Historic Gross Earnings: this lists all the relevant historic gross earnings per pay period, if any, that encompass the employee's historic gross earnings component of the workings; 

Projection Pay Run Data: this lists all the relevant pay run earnings and historic gross earnings, if any, that are used to determine projected gross earnings.

A few notables on each worksheet is provided below.

Working

• Report Date = 'As at date' entered when generating the Leave Liability report;
• Employee Leave Year Start = the date configured in the employee's Leave Allowances screen. If 12 months have passed from that date, the date will then be displayed as the next start date of the employee's 12 month entitlement period;
• Leave Entitlement Earnings and Alternative Holiday Earnings = this is the $ value of the employee's entitlements that will be paid out on termination;
• Historic gross earnings: take note here that there may be instances where the historic gross earnings start date is not the actual start date for that pay period, as entered in the historic gross earnings export. This will occur when the employee's leave year start date falls after the actual historic gross earnings pay period start date. Additionally, in this instance, we will pro rata the earnings of that first historic pay period. Further information on how pro rata earnings are calculated for historic gross earnings can be found here.
• Pay run gross earnings: similarly to historic gross earnings, there may be instances where the first pay run start date is not the actual pay run start date for that pay period, as processed in the system. This will occur when there are no historic gross earnings being applied and the employee's leave year start date falls after the pay run start date. This flows on to the next section which calculates an employee's average weekly gross earnings. 
• Average weekly gross earnings: to determine average weekly earnings based on actual gross earnings paid, the number of weeks spanning the period of actual earnings needs to be determined. This is where applying the later of the employee's leave year start date or historic gross earnings start date/first pay run start date is important, as it will ensure the number of weeks calculated is correct. What do I mean? Referring to the example image below, an employee's leave year start date is 14/8/19. The actual historic gross earnings start date is 12/8/19. Because the start is prior to the employee's leave year start date, the leave year start date is applied instead and used as the 'earliest included historic gross earnings' when determining the weeks of entered earnings.
  
  
  
  If the actual historic gross earnings start date of 12/8/19 was referenced instead, it would result in an inflated weeks of entered earnings result. This would be incorrect because any earnings associated with the 12th and 13th of August relate to the employee's previous entitlement period. This also results in a reduced average weekly gross amount
  
  
  
  
  
• Projection Data: this section will only contain data if the report date is greater than the last pay run end date, thereby needing projection data to determine average weekly earnings for that period where there are no actual pay run earnings. Similar to the historic gross earnings start date and/or first pay run start date, the system will apply the later of the employee leave year start date and historic gross earnings start date (or first pay run start date if there are no historic gross earnings). The reason for this is exactly the same as that explained in the "average weekly gross earnings section".