Allowance Generation Formulas and Examples
- 04 Nov 2024
- 6 Minutes to read
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Allowance Generation Formulas and Examples
- Updated on 04 Nov 2024
- 6 Minutes to read
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- DarkLight
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Generation of allowance for paid leave, sickness and other absences depends on the following settings:
- Accrual Method selected in the Absence Plan - defines when allowance is generated and granted to employee
- Paid Leave Calculation Rule (also defined in the Absence Plan) - defines how many days of annual allowance an employee is entitled to
- Absence Allowance Accrual Type (Settings > Settings and Configuration > Time and Attendance, Advanced tab) - defines whether the allowance is calculated based on the calendar days or working days
- Employee Work Pattern (Settings > Settings and Configuration > Time and Attendance) - defines the number of working days in a period
The following table contains formulas applied in case of different Accrual Method and Accrual Type setting combinations. The examples in the table are based on the following case:
- employee has 20 days of paid leave per year, based on the paid leave calculation rule;
- employee work pattern is standard (Monday - Friday, 8 hours per day);
- the allowance calculation date is March 1, 2017;
- Accrual From in the Absence Plan is set to Company Year Start Date;
- the company year start date is Jan 1;
- the number working days is based on the US calendar for 2017.
If the Do Not Accrue Allowance During Unpaid Leave check box (Settings > Settings and Configuration > Time and Attendance, Advanced tab) is selected and employee takes unpaid leave of any type, all the allowances will be recalculated based on the following formula: Number of paid leave days based on the Paid Leave Calculation Rules * Current basis of absence allowance (depends on Accrual Method) - number of unpaid leave days / Total number of days in a year. The examples of recalculation for each accrual method and type can be checked in the Unpaid Leave Recalculation Example column of the table. The examples assume that employee has taken 5 days of unpaid leave.
| Accrual Type | Accrual Method | Formula | Example | Unpaid Leave Recalculation Example |
| By Calendar Days | Daily | Number of paid leave days based on the Paid Leave Calculation Rules * Number of calendar days from Company Year Start Date till today / Total number of calendar days in a year | 20*(31+28+1)/365 = 3.3 | 20*((31+28+1)-5)/365 = 3 |
| Yearly | Number of paid leave days based on the Paid Leave Calculation Rules * Number of calendar days in a period / Total number of calendar days in a year | 20*365/365 = 20 | 20*(365-5)/365 = 19.7 | |
| Monthly Start | Number of paid leave days based on the Paid Leave Calculation Rules * Number of calendar days from Company Year Start Date till the end of the month that started / Total number of calendar days in a year | 20*(31+28+31)/365 = 4.9 | 20*((31+28+31)-5)/365 = 4.7 | |
| Monthly End | Number of paid leave days based on the Paid Leave Calculation Rules * Number of calendar days from Company Year Start Date till the end of the month that ended / Total number of calendar days in a year | 20*(31+28)/365 = 3.2 | 20*((31+28)-5)/365 = 3 | |
| Bi-Weekly Start | Number of paid leave days based on the Paid Leave Calculation Rules * (Number of fortnights that began from the Company Year Start Date till today * number of calendar days in a fortnight) / Total number of calendar days in a year | 20*(5*14)/365 = 3.8 | 20*((5*14)-5)/365 = 3.6 | |
| Bi-Weekly End | Number of paid leave days based on the Paid Leave Calculation Rules * (Number of full fortnights that passed from the Company Year Start Date till today * number of calendar days in a fortnight) / Total number of calendar days in a year | 20*(4*14)/365 = 3.1 | 20*((4*14)-5)/365 = 2.8 | |
| Monthly Start (12 Periods) | Number of paid leave days based on the Paid Leave Calculation Rules / 12 * Number of Months from Company Year Start Date including the month that has started | 20/12*3 = 5 | 20/12*2 + 20/12*((31-5)/31) = 4.7 | |
| Monthly End (12 Periods) | Number of paid leave days based on the Paid Leave Calculation Rules / 12 * Number of Months from Company Year Start Date including the month that has ended | 20/12*2 = 3.3 | 20/12*1 + 20/12*((31-5)/31) = 3 | |
| By Working Days | Daily | Number of paid leave days based on the Paid Leave Calculation Rules * Number of working days from Company Year Start Date till today / Total number of working days in a year | 20*(20+19+1)/250 = 3.2 | 20*((20+19+1)-5)/250 = 2.8 |
| Yearly | Number of annual paid leave days calculated based on the Paid Leave Calculation Rules * Number of working days in a period / Total number of working days in a year | 20*250/250 = 20 | 20*(250-5)/250 = 19.6 | |
| Monthly Start | Number of paid leave days based on the Paid Leave Calculation Rules * Number of working days from Company Year Start Date till the end of the month that started / Total number of working days in a year | 20*(20+19+23)/250 = 5 | 20*((20+19+23)-5)/250 = 4.6 | |
| Monthly End | Number of paid leave days based on the Paid Leave Calculation Rules * Number of working days from Company Year Start Date till the end of the month that ended / Total number of working days in a year | 20*(20+19)/250 = 3.1 | 20*((20+19)-5)/250 = 2.7 | |
| Bi-Weekly Start | Number of paid leave days based on the Paid Leave Calculation Rules * (Number of working days in fortnights that began from the Company Year Start Date till today * number of working days in a fortnight) / Total number of working days in a year | 20*(5*10)/250 = 4 | 20*((5*10)-5)/250 = 3.6 | |
| Bi-Weekly End | Number of paid leave days based on the Paid Leave Calculation Rules * (Number of working days in full fortnights that passed from the Company Year Start Date till today * number of working days in a fortnight) / Total number of working days in a year | 20*(4*10)/250 = 3.2 | 20*((4*10)-5)/250 = 2.8 | |
| Monthly Start (12 Periods) | Number of paid leave days based on the Paid Leave Calculation Rules / 12 * Number of Months from Company Year Start Date including the month that has started | 20/12*3 = 5 | 20/12*2 + 20/12*((20-5)/20) = 4.5 | |
| Monthly End (12 Periods) | Number of paid leave days based on the Paid Leave Calculation Rules / 12 * Number of Months from Company Year Start Date including the month that has ended | 20/12*2 = 3.3 | 20/12*1 + 20/12*((20-5)/20) = 2.9 |
Note
For the Monthly Start (12 Periods) and Monthly End (12 Periods) methods, a fixed amount will be accrued each month on condition that the employee worked all days during every month for which allowance has been calculated. If the employee didn't work all days during a certain month, for that month only a portion of allowance will be accrued on the basis of the number of worked working/calendar days (for other months, a fixed allowance number will be still accrued). Factors (any or a combination) that may affect the number of working days per month and split the calculation:
- The Calculate Annual Leave Based On Employment History is enabled and, for example, a work pattern was changed in the middle of a month. The Calculate Annual Leave Based On Employment History setting is not available by default and is added upon customer's request by the implementation engineer.
- The Do Not Accrue Allowance During Unpaid Leave setting is enabled and the employee took unpaid during a certain month(s) (see the examples above)
- A change in the allowance calculation rules
- Employee's employment or service date are later than the start of the accrual period (e.g. the employee was employed in the middle of a month)
- The employee termination (e.g. the employee was terminated in the middle of a month, and for that month only a portion of allowance will be calculated)
Note
Allowances can also be calculated in proportion to employee work pattern FTE on condition that the Calculate Annual Leave Based On Employment History setting is set to Yes and the work pattern is specified for the employee. In this case, the results of allowance calculation are multiplied by the employee's work pattern FTE.
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