Procountor allows you to use automatic calculation of accumulated and used salary rights. By default, this calculation is not in use.
Implementation of holiday calculation requires that you enter salary periods in Management > Salary info > Salary periods and that you use those periods when calculating salaries.
You must set the employees’ Holiday code according to the appropriate accumulation rule in Payroll > Salaries (old) > Employee info > Show salary info > Holiday salary info. In addition, you can define the Calculated employment start date, which is used by the system to determine whether to accumulate holiday rights 2 or 2.5 days per month. This date is entered when it has been agreed with a new employee that holiday rights are accumulated 2.5 days per month starting from the beginning of the employment.
Holiday rights are accumulated either 2 days per month or 2.5 days per month, according to the following rule:
If the person’s employment started on 29 March 2011, the accumulation rate is 2 days per month, because the holiday calculation is based on the previous holiday year.
The new holiday year starts 1 April 2011, and the accumulation rate is 2.5 days per month, if the employee is employed for a whole year. Because it is not known for sure, it is assumed to be true in favour of the employee, and the accumulation rate of holiday rights at 2.5 days per month is used for the whole year.
The value entered in Payroll > Salaries (old) > Employee info > Salary info > Employments Start date is used by the system to determine whether to accumulate holiday rights at 2 or 2.5 days per month, when the calculated employment start date has not been entered. If none of those dates has been entered, the holiday rights accumulation rate is 2 days per month.
In section Payroll > Salaries (old) > Employee info > Salary info > Absences you can enter the absence reasons, such as Maternity leave, dates, and the marking of whether the absence accumulates the holiday rights.
In section Payroll > Salaries (old) > Employee info > Salary info > Holiday rights you can find information on accumulated and used holidays by holiday year and month. The values come in according to the date of the salary slip. For example, if the person is on holiday for 21 days in July 2011, it can be seen in the Holiday rights view in the Holiday year 2011 July Used (from calculations) column. Values coming in from salary slips can be replaced by entering your own values, for example when you implement Procountor and enter the holidays accumulated up to that moment.
To enable automatic holiday calculation, you have to use the salary periods when creating salary slips.
When you create a salary slip for the employee, you can see the amount of days warranting holidays in the Salary slip view’s Slip info.
Salary types accumulating holiday rights.
- For a monthly salary earner, the base salary row is only included in the holiday rights calculation.
- For an hourly salary earner, salary rows Hourly salary, Additional work and Overtime compensation base are included in the holiday rights calculation.
Holiday salary in the salary slip:
For a monthly salary earner, the holiday salary appears as three rows in the salary slip. One of the rows is the normal monthly salary. In the second row, the share of the holiday salary is subtracted from the monthly salary. The third row shows the holiday salary. As the salary type you can select either Holiday pay, monthly wages or Holiday bonus, standard divider 25.
For an hourly salary earner (holiday code 14 days or 35 hours), the salary slip contains the normal base salary row and a holiday salary row. As the salary type you can select Holiday pay, hourly wages.
For an hourly salary earner (holiday code percentage-based holiday salary), the salary slip contains the normal base salary row, a holiday salary row and the holiday earning year’s income field, which is the basis of the holiday salary. As the salary type you can select Holiday pay 9% or Holiday pay 11.5%.
In the holiday salary row, enter the amount of working days during the holiday period in the Amount column and the daily salary in the Price column.
In accordance with the Annual Holidays Act effective as of 1 April 2005, Procountor calculates the default daily salary of a monthly salary earner as the base salary divided by the number of workdays of the salary period. According to the old Annual Holidays Act, holiday salary was calculated by dividing the monthly salary by 25. The Annual Holidays Act still also allows this calculation method based on the standard divider. If you want to apply that method in Procountor, use salary type Holiday pay, monthly wages, standard divider 25.
The year field:
- For monthly and hourly salary earners (holiday codes 14 days and 35 hours), you must enter the information for which holiday earning year’s holidays are concerned. The information affects the functioning of the Holiday reservation report.
- For an hourly salary earner whose holiday code is percentage-based holiday salary, select the holiday earning year from the drop-down list to specify which year’s income is used as the basis for holiday salary calculation. For example, the holiday earning year 2009 is the year from 1 April 2009 to 31 March 2010.
Amount of used holidays field:
- For a monthly salary earner, you must subtract the amount of workdays in the holiday period from the amount of days warranting holidays in the slip info. Before changing this value, you must enter the holiday salary rows.
- When entering holiday salary for an hourly salary earner, if you enter the amount of holiday salary period’s workdays in the Amount column, you must subtract that amount from the amount of days warranting holidays in the slip info.
The holiday salary code of a person with a percentage-based holiday salary displays the field Holiday year salary amount in the person’s salary slip. In that field, you can enter the sum that the system uses for salary types Holiday pay 11% and Holiday pay 9% when calculating the holiday salary amount. If you have paid salaries to the person through Procountor in the Holiday year, the system automatically enters the income of the selected Holiday year to that field. The Holiday year salary amount includes monetary salary types: Base salary, Time-rate pay, Base salary reductions, Personal salary shares, Production wage, Piece rate, Daily pay, Other monetary salaries and non-working hour salary types: Sick leave wage, Injury-time wage, Maternal time wage, Maternity allowance and Parental leave.
Upon payment of the salary slip, the system updates the information of the used holidays in the Holiday rights view.
Note! If the salary period must be e.g. 1 to 31 March (and the salary periods starting from 1 April 2011 are already in use), you must first go to Salaries > New salary list >Holiday year and select year 2010 in the drop-down list, which enables you to pick up a salary period from the previous holiday year. You can then change the payment date to 1 April 2011. The holiday year in use prevents the creation of salary periods belonging to the previous holiday year.
Holiday pay, Procountor has the following salary types: Holiday pay; Holiday pay, hourly wages; Holiday bonus, standard divider 25 and Leave for which holiday bonuses are paid, standard divider 25. You can find more information on salary types here.
If you calculate holiday pay for a monthly-salary employee using salary type Holiday pay, Procountor provides a default value for the daily holiday pay in the Price field calculated as half of the holiday salary divided by the amount of working days in the salary period. This salary type is used when the holiday pay is agreed to be half of the holiday period’s salary. To put it into effect using this salary type, the holiday pay must be calculated in the same period as the holiday period’s salary.
For an hourly salary earner, holiday pay is calculated using salary type Holiday pay, hourly wages. In this case, Procountor provides no default values.
Collective agreements often state that holiday pay is calculated using a standard divider. In such cases, holiday pay is calculated using the salary type Holiday bonus, standard divider 25. For monthly salary earners, Procountor provides a default value for the daily holiday pay in the Price field calculated as half of the holiday salary divided by 25.
Collective agreements can also include other specifications for calculating the holiday pay, which require changes in defaults. Collective agreements can also include other specifications regarding the payment of the holiday pay (e.g. whether it must be paid before or after the holiday, or half of the sum before and half after).
The tax is always withheld from holiday pay according to the base percentage in the salary period based calculation (Tax card A). In cumulative calculation (other tax cards), tax is withheld in the same way as from any salary.
Holiday calculation contains 2 reports, which can be found in Salary reports. The holiday information used in both of them is retrieved from the Holiday rights view in the person’s salary info.
The Holiday rights report shows the accumulated and used holidays by person and the amount of days or hours warranting holiday, and absences in the selected holiday year.
The Holiday reservation report provides a calculation for creating the holiday salary reservation. The report shows the accumulated and used holidays from the most recent and previous holiday years. Based on that information, the report calculates the holiday salary reservation and the reservation for social security costs.
Example of holiday salary calculation
In holiday salary calculation, actual working days are considered as workdays and a weekday means a day, which is not a Sunday, a religious holiday, Independence Day, Christmas Eve, Midsummer Eve, Easter Saturday or May Day. Days which are not weekdays do not take up a person’s holidays when they appear within the time period of his/her holiday.
The main rule: One holiday week equals 6 days’ holiday.
A person’ monthly salary is €2,300.00 and he has a mobile phone allowance worth €20 each month. His tax card is type A, annual income limit €27,000.00, base percentage 20% and additional percentage 30%. He took four weeks’ holiday in March 2010. He is paid Holiday pay (by agreement 50% of the holiday salary) in the same salary slip as the holiday salary.
The four-week holiday period contains 4*6 weekdays, i.e. 24 days’ holiday. The amount of days warranting holidays in March is 23. The amount of workdays in March is also 23, of which 20 coincide with the holiday period.
This person’s monthly salary of €2,300.00 is used as the basis for calculating the holiday salary: the daily salary is €2,300.00/23 = €100.00, which is multiplied by the amount of holidays i.e. €100.00 * 20 = €2,000.00. The Base salary deduction for the leisure time is equal to the holiday salary. The normal salary is calculated thus: Base salary minus Base salary deduction, leisure time, i.e. €2,300.00 - €2,000.00 = €300.00 (or 3*€2,300.00/23).
Holiday pay is half that of the holiday salary, i.e. 20*€2,300.00/23*0.5 = €1,000.00. Tax withholding from the holiday pay is calculated according to the base percentage.
In the salary row “Holiday pay, monthly wages” of this monthly-salary earning employee on holiday, enter 20 in the “Amt” field, which indicates the basis of the calculated holiday salary. Enter 24 in the “Amount of used holidays” field, which indicates the amount of holidays that the person uses, and 3 in the “Amount of days warranting holidays”.
In this example, we used a month that contains 23 days warranting holidays. Of these days, the person spends 20 days on holiday. This leaves 3 unused days warranting holidays. The earned holiday rights in this month are calculated: The amount of days spent on holiday (20) plus unused days warranting holiday (3) equals 23 days.
The amount 24 is transferred to Used holidays in the Holiday rights view.