Calculate the leave entitlement based on HR

This description applies only to the calculation of leave entitlement for the leave type calculated using the Leave entitlement (accrual) based on HRM - pro rata method.

The periodical entitlement is always calculated for each type of leave per leave period. In many organisations the leave period is equal to a calendar year, but you can also use leave periods per quarter or use a broken financial year.

The leave entitlement is rounded up to the opening balance (basis + extra periodical entitlement). The rounding difference is then settled with the basic periodical entitlement. Leave balance corrections and leave entries have no influence on the rounding.

Profit always uses the employee's timetable for leave entitlement calculations. This allows Profit to accurately determine the number of workable hours of the employee, even in the case of different timetable variations. Based on the timetable, Profit first determines how many hours an employee actually works, and from this derives the periodical entitlement. This also allows for an accurate calculation in the case of short employments, in case of work timetables with greatly varying working hours and in case of unpaid leave (with no leave accrual over the hours of unpaid leave).

Note: 

For each leave year the leave entitlement of the employees is automatically calculated per leave type on a prorated basis and based on their timetable, with a maximum of 5 working days per week. Any changes to the CLA are taken into account (more/less leave entitlement per holiday year), as well as changes to the timetable of the employee during the holiday year. If in the course of the year there is more than one timetable, then the number of days is determined per timetable.

Basis calculation

The formula for the calculation of the periodical entitlement in hours is:

Periodical entitlement - Basic leave entitlement * (Workable hours of employee / Workable hours in CLA)

Here, the number of workable hours is always determined per leave period. If the leave period is a calendar year, Profit determines the number of workable hours per employee and the number of workable hours per CLA on a calendar year basis.

A short explanation of the elements in the formula can be found below.

Basic leave entitlement in hours

Each leave type has a basic leave entitlement. This can be found in the CLA/term of employment and is the same for all employees. The basic leave entitlement applies to the leave period that is linked to the CLA/term of employment.

Number of workable hours per employee/leave period

There are various scenarios for this, depending on the type of timetable the employee has and the part-time percentage. For a specified timetable (fixed working times), a different calculation is used than for a non-specified timetable. The different scenarios are explained separately.

Number of workable hours per CLA/leave period

This data is taken from the CLA/term of employment and is the same for all employees.

Workable hours per leave period = (hours per working week / days per working week) * working days per leave period

The number of hours and days per working week can be found in the properties of the term of employment. The number of days per leave period can of course differ per period.

Example:

The working week has the following properties:  

• Hours per week: 40
• Days per week: 5

The year 2011 has 260 working days. For a leave period of a year the calculation is:

Workable hours per leave period = (40/5) * 260 =2,080

The year 2014 has 261 working days. For a leave period of a year the calculation is:

Workable hours per leave period = (40/5) * 261 = 2,088

The number of working days per leave period is made up of all working days in the leave period that fall within a working week. A working week can be Monday until Friday but of course can also have a different composition, depending on the situation within the organisation.

Note:

These numbers apply to all examples because the calculation method remains the same.

Leave entitlement in case of a full-time employment

For employees who are in full-time employment during the entire leave period, the basic leave entitlement is applied without further recalculation. For these employees the basic leave entitlement is the same as the periodical leave entitlement. The rest of this description does not apply.  If an employee is in employment for only a part of the leave period or only works part-time, then the basic leave entitlement must be converted into a leave entitlement according to the description below.

Part-timer with a weekly timetable

In the case of a weekly timetable the employee has the same timetable every week and the working hours are specified per day. The weekly timetable can be a default timetable from the CLA/term of employment, or be specified at the employee level.

The calculation of the leave entitlement has changed as from 2012. Until 2012, the situation could occur where an employee's leave entitlement in two subsequent years was different. Also, two employees with the same part-time percentage could have a different leave entitlement, depending on the days on which they worked.

Since 2012, Profit checks if the employee works the same number of hours per week throughout the year. If this is the case, Profit multiplies the basic entitlement by the part-time percentage. This eliminates differences between employees with the same part-time percentage.

Suppose an employee works 5 days and 36 hours per week. The full-time working week is 40 hours per week and the basic leave entitlement is 160 hours per year.

In this case Profit calculates the leave entitlement as follows: 90% * 160 = 144

Up to and including 2011, Profit calculated the leave entitlement as described in the paragraph below.

In the course of a year of leave, work a different number of hours per week

If, during a leave year, the employee starts working a different number of hours per week, Profit calculates the number of days the employee actually works throughout the year. Profit compares this number with the total number of working days in the year.

Until 2012 this calculation method also applied to the calculation of the leave entitlement for part-time employees without any changes to their number of hours per week.

Profit calculates an employee's workable hours for the year 2011 as follows:

The year 2011 has 2,080 workable hours (in case of a 40-hour working week of 5 days).

• Periodical leave entitlement for 2011 =  (1,872 / 2,080) * 208 = 187.2 (converted to hours:minutes 187:12).
• Periodical 'ATV' entitlement for 2011 =  (1,872 / 2,080) * 80 = 72.00

The year 2012 has 2.088 workable hours (in case of a 40-hour working week of 5 days).  The number of workable hours is 1,880 .

• Periodical leave entitlement for 2012 =  (1,880 / 2,088) * 208 = 187.28 (converted to hours:minutes 187:17).
• Periodical 'ATV' entitlement for 2012 =  (1,880 / 2,088) * 80 = 72.03 (converted to hours:minutes 72:02).

The difference between 2011 and 2012: 2011 consists of 52 weeks with working days from Monday to Friday. This brings the number of working days to 260. The year 2012 consists of 53 weeks. 31 December 2012 is on a Monday and is the last working day. This means the employee has one more working day over this year. This affects both the number of workable hours according to the CLA and the number of workable hours for the employee.

Weekly timetable with irregular working hours

The above calculation applies to all employees with a weekly timetable even if this timetable contains very irregular working hours. Profit always determines the number of workable hours per year based on the days when the employee works. The tables below relate to a part-time employee who works 36 hours, but with greatly varying working hours.

The table for 2011:

The table for 2012:

Because the employee works relatively a lot on Mondays, the total number is somewhat higher. This also affects the periodical entitlement:

• Periodical leave entitlement for 2012 =  (1,884 / 2,088) * 208 = 187.67 (converted to hours:minutes 187:41).
• Periodical 'ATV' entitlement for 2012 =  (1,884 / 2,088) * 80 = 72.18 (converted to hours:minutes 72:11).

Part-time employee with a variable work pattern

A variable work pattern has no fixed working hours. However, you can record the number of hours per week in the employee's timetable.

An employee works 24 hours per week, spread over 5 days (it is not known on what days).

The full-time working week is 40 hours per week and the basic entitlement to statutory leave is 160 hours per year.

In the case of a variable work pattern, Profit calculates the number of workable hours as follows:

Workable hours of employee = Workable hours according to CLA * (hours per weekly timetable / hours per week in CLA).

In this example, the calculation is as follows:

• Workable hours in 2014 = 2,088 * (24 / 40) = 1,252.8

Leave entitlement per employee:

• Periodical leave entitlement for 2014 = (1,252.8 / 2,088) * 160 = 96 hours

Work timetable

For employees with a work timetable there are two options. This depends on the Determine leave entitlement based on work timetable setting in HR / Management / Settings:

• Check box not selected

  Profit determines the number of workable hours per employee on the basis of the parent timetable.

• Check box selected

  Profit determines the number of workable hours per employee on the basis of the work timetable.

The explanation below refers only to calculations based on the work timetable.

Suppose that an employee with a work timetable works 32 hours (four days) one week, and 40 hours. on alternating weeks.

The employee starts with a week of four days, then a week of five days, etc. This means that the employee works on 26 Fridays.

The full-time working week is 40 hours per week. The year 2011 has 2,080 workable hours (in case of a 40-hour working week of 5 days).

• Periodical leave entitlement for 2011 =  (1,872 / 2,080) * 208 = 187.2 (converted to hours:minutes 187:12).
• Periodical 'ATV' entitlement for 2011 =  (1,872 / 2,080) * 80 = 72.00

Reduction in leave entitlement in case of unpaid leave

Employees do not accrue leave entitlement over unpaid leave, if unpaid leave is entered as a type of leave of the Unpaid leave basic leave type. This is in accordance with the labour law (as of 2008). For example, if an employee takes parental leave, you can automatically have this affect the leave balances of a leave type (such as vacation or extra leave based on age and/or years of service).

Profit deducts hours of unpaid leave per leave period from the number of workable hours of the employee in the leave period. This means Profit reduces the leave entitlement of the type of leave that is calculated based on HR.

Leave entitlement based on bank holiday leave (CLA for hospitals)

For employees who also work on public holidays, Profit can assign extra leave based on the days closed table. For these employees, you add two types of leave: one for normal leave (basic leave type Leave) and one for the public holiday leave.

Note: 

Public holiday leave only applies if you use the CLA for hospitals.

Profit determines the public holiday leave based on the public holidays that have been included in the days closed table and based on the following formula:

Extra leave entitlement = Number of public holidays * (Part-time percentage * Number of hours per week / days per week)

Profit uses the following data:

• Number of public holidays

  The number of public holidays from the days closed table during the contract period of the employee and the leave period.

• Part-time percentage

  From the employee's timetable.

• Number of hours per week / number of days per week

  From the working week in the CLA/term of employment.

  Example: 

  The days closed table of 2010 contains five public holidays (only public holidays that do not fall in the weekend).

  For a full-time employee (36 hours per week) who is in employment for the entire year, Profit makes the following calculation:

  Extra leave entitlement = 5 * (1.00 * 36 / 5) = 36 hours.

  If this full-time employee leaves employment on 31 March 2009, only new year's day still falls within the employment. Profit recalculates the extra leave entitlement:

  Extra leave entitlement = 1 * (1.00 * 36 / 5) = 7.2 hours.

No pro rata calculation at start or end of employment (CLA for hospitals)

Profit calculates the prorated leave entitlement at the start and end of an employment. With regard to the leave entitlement calculation, the CLA for hospitals determines that the month of the start of employment must be regarded as a full month if the employee starts employment before the 16th of the month. The same applies to the end of employment, if the employee ends employment after the 16th of the month.

When leaving employment Profit uses the date of the end of the employment. For this reason, you must set the End employment date to ensure a correct calculation.

You can configure Profit so that in a leave type the deviating calculation is used according to the CLA for hospitals.