FUTURE OR HOLIDAY PAY
Future or holiday pay is not normally a problem in monthly payrolls, as the employee is paid the normal monthly pay each month. However, with weekly payrolls it is a problem, as it is normally paid in advance, before the final week (prior to leave) has been worked. This leads to complicated logic, especially as regards calculating taxes and other deductions. In many cases, manual input is required.
With nuQ, the procedure is similar to that for backpay. A vacation pay advice is entered, specifying the actual dates when the employee will be on vacation, and requesting immediate payment. No further action is required.
nuQ calculates the pay for the requested period just as it would do for a normal, current, pay period. As it is possible to input future dated data into the system, it will give effect to (for example) any pay increase that falls due in the vacation period. The only difference is in the tax calculation – tax will be calculated on a non-cumulative basis, as year to date figures will not be available for the intervening period between the current pay period and the date for which vacation pay is being calculated.
The calculated amounts will be stored in the system as relating to the period on vacation, but paid in the current pay period. The payslip will reflect the vacation pay on the current payslip immediately after the pay for the current period, with a suitable heading. The normal and leave net pays will be added together for payment purposes.
When the vacation pay period becomes the current pay period, the system will recalculate the pay due to the employee for that week, and will pay or deduct any differences that may arise in the current period. Differences could arise because some pay rules or rates changed between the time the vacation pay was paid and the new calculation. Tax will be the same (unless earnings change), as it will still be calculated on a non-cumulative basis for that period. When the employee returns from leave, the tax calculation will revert to the method normally used. Normally there should be no difference between the original and the new calculations, so there will be no payslip generated.
This is probably the time to explain that the system as supplied includes elements and associated input screens to calculate vacation and sick leave accruals, with variables such as days accrued per pay period and forfeiture rules held in tables that the user will enter. Vacation days taken will be automatically taken into account when it is advised, as will vacation encashments. If requested, the system will also calculate a provision for vacation pay to be put through the employer’s books, giving the net entry to be made each pay period for each employee to bring the accrual up to date.
Any public holiday that falls within the period of vacation taken will not be set-off against the employee’s leave entitlement. The number of days to be set off against the accumulated vacation entitlement will be calculated by reference to the employee’s work pattern. Public holidays that occur will similarly be checked against the employee’s work pattern to determine whether or not they constitute paid public holidays. This means that vacation pay for part time employees and employees who work abnormal hours such as night watchmen will be calculated correctly without any human intervention.