Leave Based on GESA

This caters to a requirement for employees to be paid pro-rata annual leave on termination based on the following:

  • If the employee has been with the company for less than 12 months, they get paid 6% or 8% of their Gross Earnings Since Anniversary as a termination payment and don't get paid out their leave balance.
  • If an employee has been with the company for more than 12 months, they get paid with their annual leave entitlements, not pro-rata, with the additional payment on their earnings since their entitlement date multiplied by 6% or 8%.

The method of calculating the new pro-rata and accrued leave entitlements are shown in the following examples:

Employee Details  
Anniversary Date 1st January
Leave Details As of 15th October (end of pay period)
 
  • Net Entitlement Hours = 100
 
  • Pro-rata Hours = 80
 
  • 4 weeks leave per annum (leave accrual method is flagged for percentage calculation using 8%)
GESA $10,000 as of 15th October
Hourly Rates  
 
  • Base Rate = $10.0000
 
  • Average Rate = $12.0000
  The Average Rate is indicated on the employee's master file where a special calculation method has been set up for annual leave to compare the higher of the base rate or the average rate. To do this you must set up a special Calculation method and attach it to the employee on the Payment Details window. Otherwise, the Base Rate will be used.
Calculating Pro-rata GESA x Leave Accrual Package
$10,000 x 8% = $800
  If the leave accrual method was setup as 6%, then the result would be $600.
  To calculate the employee's total leave liability, the following calculation is required.
  Determine which rate to use - the higher value between employee Base Rate and the Average Pay Rate. In the above example it will be $12.0000.
Work out the Net Entitlement Leave Liability Net Entitlement x Higher value between the two rates
100 hours x $12.00 = $1,200.00
Calculate Total Liability (GESA + Net Entitlement Liability) x Leave Method Percentage
($10,000 + $1,200) x 8% = $896.00
  The percentage is calculated on both the Net Entitlement Leave Liability Value and the Pro-rata value.

 

Employee Details  
Anniversary Date 1st January
Leave Details As of 15th October (end of pay period)
 
  • Net Entitlement Hours = zero
 
  • Pro-rata Hours = 103
 
  • Leave was taken in August with a leave balance of 120 hours Entitlement and 90 hours Pro rata
  • A total of 184 hours, 120 hours was taken from Entitlements, 64 hours from Pro-rata
  • The payment of this leave amounted to a total of $2208.00, $1440 is apportioned to Leave Entitlements, $768 relates to Pro-rata.
  • Values were obtained by splitting the total amount paid for this leave $2208 and working out the fraction that is attributed to Entitlements and Pro-rata.
  • Entitlements are always taken first until a zero balance is achieved, then Pro-rata. The $2208 was split 120/184 to Entitlements, 64/184 to Pro-rata.
 
  • 4 weeks leave per annum (leave accrual method is flagged for percentage calculation using 8%
GESA $20,000 as of 15th October
Hourly Rates
  • Base Rate = $10.0000
 
  • Average Rate = $12.0000
  The Average Rate is indicated on the employee's master file where a special calculation method has been set up for annual leave to determine the higher value between base rate and average rate. To do this, you must set up a special Calculation method and attach it to the employee on the Payment Details window, otherwise the Base Rate will be used.
Calculating Pro-rata

GESA x Leave Accrual Package

$20,000 x 8% = $1600
  If the leave accrual method was setup as 6%, then the result would be $1,200
  Less Leave taken that relates to Pro-rata for this year of $768
  Final Pro-rata Leave Liability would be $1600 - $768 = $832
  To calculate the employee's total leave liability, the following calculation is required.
  Determine which rate to use - the higher value between employee Base Rate and Average Pay Rate. In the above example it will be $12.0000.
Work out the Net Entitlement Leave Liability Net Entitlement x Higher of two rates
zero hours x $12.000 = $0.00
Calculate Total Liability ((GESA + Net Entitlement Liability) x Leave Method Percentage - value of Pro rata taken
(($20,000 + $0) x 8% = $1,600 - $768) = $832

 

 

The following steps are used to setup GESA:

  1. Setup GESA code from the Gross Earnings since Anniversary Codes window.
  2. Allocate a GESA code by using the GESA linked Earnings Code field to employees, either during the Hire process or on the employee's Payment Details window.
  3. Setup the record for Linked Earnings to establish the Hours Type Codes and Allowance/Deduction Codes that the calculation of the GESA percentage is to be based on.
  4. Setup the Leave Accrual Methods that will be using GESA calculated with the percentage that is to be applied.
  5. Attach the Leave Accrual Methods to the Leave Classification for employees, either during the Hire process or on the employee's Leave Entitlements window.

 

Once a payrun is closed and during the Close Payrun process the GESA accumulated by employees is calculated. This is based on the following:

  • The GESA Linked Earnings Code attached to the employee in the Payment Details window.
  • The Hours Types and Allowance/Deduction Codes in the Linked Earnings record setup for the GESA linked Earnings Code.
  • The Leave Accrual Method attached to the employee, that supplies the percentage to be calculated.

 

Once the Close Payrun process is completed,the GESA values can be reported on.

  • The employee's Payment Details window shows details of the employee's Gross Earnings since their last Anniversary, based on the Hours Type Codes and Allowance/Deduction Codes attached to the GESA Linked Earnings code.

 

If the Leave Accrual Method has the GESA Percentage populated, a GESA csv file is generated when the Leave Liability Report process is run. The GESA csv file is placed in the Datafiles tab of Preceda Console.

Field Name Description
W58LVL1 Level 1 Code
W58LVL2 Level 2 Code
W58LVL3 Level 3 Code
W58LVL4 Level 4 Code
W58LVL5 Level 5 Code
W58ACCT Account Code
W58DEPT Department Code
W58IDNO Employee ID Number
W58A$N Employee ID Number
W58ACCD Leave Accrual Method
W58PERC GESA Percentage from the Leave Accrual Method
W58RATE The greater of Average Rate or Ordinary Pay Rate (as set up in Calculation Methods) or, if no Calculation Methods id in place, the Base Pay Rate is used.
W58HDAT Hire Date
W58ANIV Next Anniversary Date - when pro-rata moves into entitlement
W58ACDT Accrued to Date
W58ETTL Current Entitlement in Hours
W58PROH Current Pro-rata in Hours
W58TAKN Current Taken in Hours
W58BALN Leave Balance in Hours (W58ETTL + W58PROH - W58TAKN)
W58ENTA The $ value of the current entitlement
Calculated value for (W58ETTL - W58TAKN)
If greater than 0 x W58RATE
Otherwise zero
W58GESA Gross Earnings since Anniversary. This field contains the employee's earnings since the last anniversary, based on the set up in the Linked Earnings window.
W58PLVA The $value of the pro-rata leave. (W58GESA + W58ENTA) x (W58PERC/100).
W58LTSA The total value of pro-rata Leave already paid since the last anniversary. Taken from the Leave Entitlements window.
W58TOTL $value of total liability. (W58ENTA + W58PLVA - W58LTSA)