Holiday Pay
Employees on holiday (vacation leave) are paid an average weekly rate. This rate can differ from the basic pay.
To add holiday pay, users can Add a Leave Application. Payslips will automatically calculate any holiday within the pay period when they are saved.
Buddy includes a default calculation of average weekly pay. This can be edited and overwritten on the Holiday Pay item at the payroll level.
Converting Holiday Pay to Top-Up
Within the Payroll Calculation Options, users can enable the "When on Holiday, use a TopUp instead of full Holiday Pay" setting.
This will convert the pay item to only a top-up, which reflects only the difference between the average weekly pay and the basic pay (if the average pay is higher).
Absence Deductions for Time Off
A second itemisation option is to enable the Payslip Formats and Customisation of adding attendance adjustment for absences.
This is particularly useful for non-paid holidays (e.g. unpaid leave).
This means that the Basic Pay will be shown in full, and then any Attendance Adjustment will be deducted separately.
In case of paid vacation, like Holiday Pay, the Holiday Pay will still show as a separate item in full.
Rolled-Up Holiday Pay vs Accrual for Part-Timers
For employees on variable pay, automated rolled-up holiday pay can be enabled:
- Either by enabling it for all casual employees from Leave Settings: "Auto-Pay Accrued Leave for Casual Employees"
- In the Salary Details for the employee by enabling "Auto Pay Holiday Pay at 12.07%"
When you save payslips for such employees, 12.07% of the weekly pay will be added as a pay item of rolled-up holiday pay.
Weekly Pay
Holiday Pay uses the calculation of Weekly Pay of up to the last 104 hours, whilst Rolled-Up Holiday Pay is calculated only on the Weekly Pay of the current pay period.
The weekly pay consists of the basic pay and some additional items. The following logic determines whether an item is included in the average pay or not:
- The pay item has to be taxable.
- If the item is added in the Salary Details (as a recurring salary allowance), then it will always be included as part of the average pay
- If the item is not recurring, Custom Pay Items, the item will be included IF the "Inc in Holiday Pay" advanced setting is enabled
This logic applies to both overtime and other pay items.
Excluding Pay Items from Holiday Pay
That means to exclude a pay item from being included as part of the average weekly holiday pay, then it has to be one of the following conditions:
- The item is not taxable, or
- Both the following
- The item is not included in the Salary Details of the employee
- The item's toggle for "Inc in Holiday Pay" is disabled