Holiday pay is one of the important functions in the payroll system to track the number of holidays/total holiday pay paid out/accrued by the worker in the calendar year/overall in that particular employment. In MDP, we have added this function both at the company level and at the employee level. Currently, we have given the "Percentage Based Accrual" function in the system.
Company-Level Settings:
Under the Company Details, the new tile has been added for setting up "Holiday Pay". If you want to add the Holiday Pay, you have to click "Add" and then add your holiday scheme. It works similarly to a pension, where you can add different pension schemes and then assign the specific scheme to the employees
To create a new holiday scheme, click "Create Holiday Pay Scheme".
You can add a holiday pay scheme by entering "Holiday Scheme Name" (you can give any name as you wish); the Holiday Scheme Type will currently only be "Percentage Based Accrual" and the Display Units will now always be "Cash" because it will only show the accrual/payout values in the payroll.
Holiday Entitlement -> 28 (Default)
Working Days -> 260 (Default)
Holiday Rate (%) -> 12.07% (Default)
If you want to override it to different values, you can do so by toggling on "Override" and you will only be able to change the holiday entitlement and working days, the system will calculate the percentage based on your input.
You can choose "Show Holiday Balance on Payslip" if you would like to show the in-period and YTD accrual. If you would like to pay it out on every period, you can choose "Automatically Pay in Period." You can also override those settings on the employee level.
You have to set the Holiday Year Start Date and Holiday Year End Date. Please make sure these dates align correctly with your pay cycle start and end dates to make sure accruals are saved correctly before you carry the hliday year over to the next year.
Holiday will accrue as long as the start of the period is before the end date of the holiday year. For example:
Your holiday year finishes on the 28th of Feb 2026 and your next pay date is on the 6th of March 2026. You pay for the working period from 23rd Feb 2026 to 1st March 2026. When you pay, the holiday accrual will accrue for your previous holiday year, as the start of the paid period started on the 23rd Feb 2026, before the holiday year end date of 28th Feb 2026. This means that even though your pay date is after the holiday year-end date, you are still accruing holiday pay for the previous year, as it works based on the paid period start date.
so that it will show accordingly on your employees' records how much holiday pay they received in this holiday year. It will work based on pay period start and end dates.
There is one more option in the setting called "Carry Over Accrued Holiday to the New Holiday Year"; it means the accrued holiday balance will be carried forward to the next holiday year.
Once you have added the scheme and click "Save", it will be added to the company.
Employee Level Settings:
Once you have added the holiday scheme to the company, you would have to map the holiday pay scheme to the employees to make sure holiday pay is added in the payroll for those employees (accrual/payout).
You can map it by going to the employee record -> Holiday Scheme -> Add.
Here, you can choose any one of the schemes set in the company, then it will populate the scheme settings selected. If you want to override it, you can do that as well. You can add "YTD Total Balance" as well - it will add the YTD balances to your current period's holiday pay and it will be included in the YTDs.
Once you save it, the setting will be saved to that employee, and it will show holiday accruals and payouts per period at the bottom of the screen
Once you run payroll, holiday pay will get calculated in the payroll for the employees mapped to holiday schemes and will then show in their payslips and all the relevant reports (Pay Item Result Report and Journal Report).
Note: System will calculate holiday pay based by summing up all pay items that have the "Accrued Holiday pay" flag tunred on.
Once you approve the payroll, it will show in the contributions section in the employees' screen.
Similarly, if the employee is set to "automatically pay out holiday pay", then it will get paid out for each payroll, like below:
