The purpose of this document is to provide the Payroll Processor with a guide on how to configure a Vacation Accrual and Payout using Canadian Payroll.
A: Pay Vacation
Step 1: Paycode
A Paycode is required to pay the employee the amount that has been accrued for them.
Review the instructions in “Adding a new Pay Code”.
Note: At the time of this writing Canadian Payroll only supports one expense account for wages. Therefore, when the General Journal is produced the Vacation Payout will be added to the Wages Account Expense 62100. This can be corrected at the time the General Journal is produced before it is posted.
We have configured this to be an “Hour” code, therefore you will have to also calculate the amount per hour the employee will be paid Vacation Pay. (Vacation Accrual divide by the number of days equals hours )
To see how much an employee has Accrued, check the “Change Year To Date” in the Employee Card.
In this example, Mary Dempsey wants to take one-weeks vacation payout, at $30.00 per hour times 40 hours in a pay period the amount would be $1,200.00.
Step 2: Income Details
After creating the Paycode proceed to the Payroll Worksheet and go to the Actions Tab while you have the employee line highlighted.
Click on the “Income Details” icon and create a new payment with the Income Type of “Vacation Pay” adding a memo if needed.
The amount has now been added to the employee’s income.
B: Vacation Accrual
Step 1: Deduction Setup
Create the Vacation Accrual Code. See the following example.
Note that the deduction type is “Custom” and the Category is “Deduction”. In the Employer Calc No., we have created “VACACC” for the Vacation Accrual.
Step 2: All Calculations
Proceed to the “All Calculations” icon to create the custom calculation.
Enter all the variables that make up the vacation calculation. You may need to make up a different accrual depending upon your specific requirements. ( i.e. Provincial, Union Requirements)
Step 2: Employee Variables
Proceed to the Employee Card and go to the Employee Variables. Create a New Employee Calculation Variable using the Calc No and Variable Set up in the “All Calculations” in the previous step.
For each employee set the Default Value that applies to them. In this example, the employee will be accruing vacation pay at a rate of 4%.
Step 3: Payroll Worksheet
In the Payroll Worksheet, the Vacation Accrual automatically calculates when the “Calculate Gross” function is completed.
This information can be viewed by clicking on the “Other” icon.
This information also appears on the Payroll Register.