This article explains how to add and update an employee's holiday pay scheme, remove a holiday pay scheme, process a holiday pay payout, and understand how holiday pay is displayed after payroll.
A holiday pay scheme determines how holiday pay is accrued and paid for an employee. The scheme assigned to an employee controls how their holiday pay balance is calculated based on the company's holiday pay configuration.
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Adding Employee Holiday Pay Scheme
During employee setup, you can assign a holiday pay scheme and configure the employee's holiday pay details.
Holiday Pay Fields
Field | Description | Notes |
Holiday Scheme Name | Select the appropriate holiday scheme associated with the company. |
|
Holiday Rate Override (%) | Percentage used to calculate holiday pay. MDP calculates this based on the entitlement and working days entered. | The default value will be populated from the selected holiday scheme. You can override this. |
Automatically Pay In Period | Enable this option if you want accrued holiday pay to be paid to the employee in each payroll period rather than retained as an accrued balance. | The default value will be populated from the selected holiday scheme. You can override this. |
Show Holiday Balance on Payslip | Enable this option to display the employee's holiday pay accrual on their payslip. The default value will be populated from the selected holiday scheme. You can override this. | The payslip will show:
|
Current Daily Rate | Daily rate for the holiday pay calculation. | This will not be available for the cash type holiday pay scheme. |
Tax Year | Holiday tax year and will be populated from the selected holiday scheme |
|
YTD Total Balance (excl Unapproved Payrolls) | Enter the employee's year-to-date holiday pay balance, if applicable. | This amount is added to the current period's holiday pay and included in the employee's year-to-date figures. |
You can select one of the following options:
Save: Saves the data and proceeds to the next step in the employee creation process.
Skip: Skips the current section.
Draft: Saves your progress so you can return later.
Tip: Use the section indicators at the top of the employee setup screen to move directly between sections. For example, select Holiday Pay to return to the employee's holiday pay details.
Updating Employee Holiday Pay Scheme
To update the holiday pay details of the employee, please follow the steps below:
Navigate to the dashboard by clicking on the logo. This will take you to the Company List page.
Find the company and click the People icon
in the corresponding row. This will open a screen displaying a list of employees.Locate the employee you wish to edit and click on the Edit icon
on the corresponding row.
In the Holiday Pay Scheme section, you will have two options based on the initial setup
Add: If you didn't configure the holiday pay scheme during the initial setup, you will see the + Add option. Follow the steps outlined in the Add Employee Holiday Pay Scheme section to set up the holiday pay scheme.
More: If the holiday pay scheme is already present, click More to update the holiday pay scheme.
Make changes and click Save to apply changes.
Reset: Discards any unsaved changes and restores the last saved holiday pay details.
If no changes are required, click the Close icon
at the top-right corner of the slider to exit.
Removing Employee Holiday Pay Scheme
You can remove the holiday pay scheme assigned to an employee if the employee does not have any existing holiday pay accruals or payouts.
Click Remove Holiday Scheme on the edit holiday pay screen and click Proceed on the confirmation pop-up.
Then the holiday pay will be removed from the employee, and the + Add option will be available in the employee details screen for adding a new holiday pay scheme.
Processing a Holiday Pay Payout
To add a holiday pay payout, select Add Holiday Pay Out from the Holiday Pay Scheme edit screen. This allows you to pay out an amount from either the employee's accrued holiday pay balance or their YTD holiday pay balance.
In the pop-up window, enter the amount to be paid out. Depending on the Display Units configured in the company's holiday pay scheme, you can enter the payout in days, hours, or an amount.
For Days, it will be shown as below.
For Hours, it will be shown as below.
For Cash, it will be shown as below.
Enter the required value.
For display units, hours, and days, the holiday pay amount will be calculated using the applicable holiday rate and the number of days or hours entered.
Click Add to pay & reduce balance.
The system creates a one-off pay item for the calculated holiday pay amount. The payment will then be included in the employee's current payroll.
Holiday Pay in Payroll
Once payroll is run, the system calculates holiday pay for employees who are assigned to a holiday pay scheme.
The calculated holiday pay will be reflected in:
The employee's payslip
The Pay Item Result Report
The Journal Report
The holiday pay calculation is based on pay items that have the Accrued Holiday Pay flag enabled.
Note: Holiday pay is calculated using the pay items that have the Accrued Holiday Pay flag enabled. Make sure the appropriate pay items are configured correctly so that holiday pay is calculated as expected.
After the payroll is approved, the relevant holiday pay information will also be displayed in the employee's contributions section.
Automatic Holiday Pay Payout
If the employee is configured to Automatically Pay in Period, the available holiday pay will be paid out automatically as part of each payroll run.
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