Vacation Pay - Active employee, time taken, entire accumulator

Make this type of vacation payout when an employee wants to completely use up all accrued vacation time.

Note: This procedure takes place over 2 pay periods. Complete Part 1 in the current pay period where you are entering the vacation payout. Complete Part 2 in the next pay period, where you reallocate the insurable hours/earnings to the appropriate pay periods.

This 2-part procedure leads you through all the steps required to reallocate hours and earnings for Employment Insurance purposes. Note that, for vacation time taken with a payout of the accumulator, both hours and earnings are insurable. That usually requires some manual calculations.

If the employee has current pay, this process shows you how to evaluate the time taken as it would be AFTER the current payroll is processed. The easiest way to do this for an Active employee is to wait until the current payroll is processed. Powerpay then does many of the calculations for you. (As long as an ROE is not requested for this pay period, you can wait until the pay period is processed before adjusting the insurable hours and earnings.)

Prerequisites

Use the procedure that follows when the situation meets all of the following criteria:

  • The employee is active.
  • The employee is receiving the entire accumulated vacation pay as time taken.
  • The employee may or may not have other current pay on this payroll run.
  • There is the possibility that, after all vacation accruals on the current pay are done, the vacation payout begins in one pay period and ends in another.

Tasks

PART 1: Pay out the vacation accumulator as time taken when the employee is active

  1. Open the Employee Timesheet page.Closed From the Payroll menu, select Regular Payment > Employee Timesheet.
  2. Select the employee from the Employee List.

  3. Enter all hours and earnings including salary overrides and permanent earnings overrides, if any.

    Note: To view the employee's regular permanent earnings, go to the Permanent Rates, Factors, Earnings page.Closed From the Payroll menu, select Regular Payment > Permanent Rates, Factors, Earnings.

  4. From the Applicable Period of Time list, select a period of time that reflects the number of weeks this payout represents (current pay + vacation pay).

    This allows the CPP/QPP exemption to be applied to all earnings plus the vacation time taken.

    Note: The field Current amount in Vacation Accumulator on the Employee Timesheet page reflects the dollar value as of the last processed payroll. It does NOT include any amounts that are calculated for the current pay. At this point in the procedure, the total vacation time can be estimated after the payroll is run. The exact number of vacation hours is reported on the Insurable Earnings Adjustments page.Closed From the Payroll menu, select ROE / Employee Status Change > Insurable Earnings Adjustments.

  5. Request the payout of the Vacation Accumulator. To do so, complete the following steps:

    1. Select Yes - Time Taken from the Pay out entire accumulator? list.
    2. If you have determined that the applicable period of time is more than the current pay period, select the NEXT pay period from the For which pay period? list. This makes it easier to track the movement of hours and earnings in Part 2.
  6. Click Save.

PART 2: Adjust the insurable hours/earnings when the pay out of the vacation accumulator begins in one pay period and ends in another

Note: Complete this procedure after the current payroll is processed. In this procedure, the payroll that has just been processed is called the previous payroll.

  1. Look up the vacation dollar value as accrued on the previous payroll. To do so, complete the following steps:

    1. Find the employee on the Payroll Register (paper copy) you received with your previous payroll.

    2. Record the Hourly EQ value (hourly equivalent) for the employee.

      For hourly employees, this will be the same as their hourly rate. For salaried employees, this value will represent their regular salary divided by the number of hours in the pay period.

    3. Record the VACPAY Cur. Earn value for the employee.

      This is the total dollar amount paid out by the accumulator, including the accrual that occurred on the earnings for the previous payroll.

  2. Calculate the number of Insurable Hours that the vacation accumulator amount represents so that you have both a dollars and hours value for EI purposes. (For vacation time taken, both hours and earnings are insurable.) This requires dividing the VACPAY Cur. Earn value by the employee's Hourly EQ value.

    Record the Insurable Vacation Hours from your calculation (to two decimal places).

  3. Manually calculate what amount of vacation hours and dollars, if any, you need to move vacation hours and dollars to a pay period other than the one to which you assigned the Vacation Accumulator value on the Employee Timesheet page.

    To calculate the amount you need to move, you need the following information:

    • The Standard Hours per Pay for the employee, found on the Employee Timesheet page.Closed From the Payroll menu, select Regular Payment > Employee Timesheet.
    • If the employee worked for the entire time of the previous pay period, all vacation hours earnings start in the next pay period.
    • If the employee worked for only part of the previous pay period, vacation hours and earnings have to "top up" the previous hours worked, until the Standard Hours per Pay amount is reached for the previous pay period.

  4. Move any hours and the dollars associated with those hours to the pay periods to which they belong. Using the calculations you completed in the previous step, complete the following steps:

    1. Open the Insurable Earnings Adjustments page.Closed From the Payroll menu, select ROE / Employee Status Change > Insurable Earnings Adjustments..
    2. Select the employee from the Employee List.

    3. Select Reallocate Insurable Earnings and/or Insurable Hours from one pay period to another from the Action to be taken list, and click Go.

      Note: Because the payroll has been processed, the History section at the bottom of the page included entries you made in the previous pay period. If the vacation payout was allocated to a different pay period than the earnings on the previous payroll, the vacation hours/dollars are listed on their own.

    4. In the Move from which pay period? list, select the pay period that you originally selected on the Employee Timesheet when you paid out the accumulated vacation pay.
    5. In the Move to which pay period? list, select the pay period to which the predetermined hours and dollars are to be moved.
    6. Enter the hours and dollars amounts to be moved.
    7. Click Save.
    8. If any vacation hours and dollars belong to a third pay period, repeat the reallocation process for the third pay period.