Available for the following Payroll plans: Standard, Premium, Core Payroll
Available for the following user access levels: Admin
Employers may allow staff to adopt a 46/48/50-week year for a negotiated 12-month period. The salary paid to them will be 46/52, 48/52 or 50/52 of their full-time salary.
Within the nominated 12-month period, staff are able to apply to have two weeks (50/52) or four weeks (48/52) additional annual leave, with a proportionate reduction in salary spread over the full year.
There are 2 ways to process Purchased Leave and you will need to set up your payroll file differently depending on the method you want to report to the ATO.
- Create a specific leave allowance template for purchased leave for each option, e.g. 2 weeks, 4 weeks etc.
- Each annual leave field will have the accrual based on whatever extra annual leave is being purchased, e.g. 2 weeks would have the annual leave accrual as 0.11538 hours per hour worked:
- Assign the corresponding leave allowance template to the employee via their Employee file > Pay run defaults page.
- Create a New Pay Category > Set up a new pay category, e.g. Purchased Leave Reduction
- Add Pay Run Inclusions.
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Add a recurring negative earnings line for the employee using the new pay category. This should reflect the total value to be reduced from the employee’s earnings for the additional leave purchased.
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Pay Run - In the pay run, this will display as a negative earning against the selected category, reducing the employee’s gross wages accordingly.
- Create a specific leave allowance template for purchased leave for each option, e.g. 2 weeks, 4 weeks etc.
- Each annual leave field will have the accrual based on whatever extra annual leave is being purchased, e.g. 2 weeks would have the annual leave accrual as 0.11538 hours per hour worked:
- Assign the corresponding leave allowance template to the employee via their Employee file > Pay run defaults page.
- Change the salary of the employee by dividing leave weeks by total weeks e.g. 2 weeks extra annual leave would be Salary x 50/52. You can enter the new rate on the Employee file > Pay run defaults page.
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If you want to keep a record of the original salary, you can enter it as a note on the Employee File > Details page:
- You can also set up an anniversary date to trigger when the year is up to then pay out any remaining balance of leave not taken.
- How to deduct pay for purchased leave from each pay run
- Create a specific leave allowance template for purchased leave for each option, e.g. 2 weeks, 4 weeks etc.
- Each annual leave field will have the accrual based on whatever extra annual leave is being purchased, e.g. 2 weeks would have the annual leave accrual as 0.11538 hours per hour worked:
- Assign the corresponding leave allowance template to the employee via their Employee file > Pay run defaults page.
- Navigate to Business > Payroll Settings > Deduction Categories.
- Create a new deduction category called Purchased Leave.
Add the deduction category to the employee under Pay Run Inclusions.