From XU Magazine, 
Issue 26

Managing your employees’ leave

There can be a great level of confusion for employers regarding their employees’ leave balances and entitlements. As an employer it is important to determine if your employees are employed as casuals, permanent full time, or part time – WHY?

If casual, they could be entitled to a higher hourly rate, normally through casual loading and will only get paid when they work. It is very important to refer to their award and the additional loadings to be paid outside normal hours. Casual employees will only accrue Long Service Leave.

As a permanent employee, leave is accrued on all ordinary hours worked. CloudPayroll allows the business owner to make an informed decision to pay leave based on an employee’s leave balance. Importantly, the employer must keep a record of hours worked, the accruals and when leave is taken by an employee. When an employee leaves their employment, they may have an outstanding leave balance that is required to be paid as part of their termination payment.

CloudPayroll accrues leave on actual hours worked and can easily set up other leave accrual rules if employees receive 25 days or 30 days a year. Pay elements would be added to the employees’ template and the accruals would reflect the 25 days a year rather than the normal 20 days a year.

Monthly payrolls

CloudPayroll makes management of monthly payrolls easy. It will automatically calculate and apply 1/12th of an employee’s annual salary each month.

For example: for a full-time employee working a 38-hour week, on the template we would add 164.66 hours to be paid. For a 35-hour working week we would add 151.66 hours to be paid. The number of working days in each month do not alter the pay each month, e.g. February will be paid the same as March.

We are often asked what an employee starting employment part way through the month should be paid? The two most common methods are:

Pay the employee based on their actual hours worked in the first month x hourly rate

Deduct the hours not worked from the monthly hours they would have worked x hourly rate

Time in lieu

Some awards and registered agreements allow an employee to take paid time off instead of being paid overtime pay. This is also known as ‘time in lieu’, time off in lieu or ‘TOIL’.

CloudPayroll allows employers to record additional hours worked as Time in lieu. Employees may apply to take time in lieu through CloudPayroll’s Employee Kiosk, on any PC, Mac or mobile device. No excel spreadsheets required!

Why leave it there?

To see for yourself how the Leave Management features can benefit your clients, saving them considerable amounts of payroll administration hours and reducing errors from manual calculations and record keeping.

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