Allocating vacation pay for insurable earnings purposes

Only in the following situation where all three conditions apply does vacation pay need to have the EI History allocated manually on the Employee EI History page:

  • the employee is taking time off for the vacation time, AND
  • the accumulator is being paid out, AND
  • the vacation time begins in one pay period and ends in another

In all other situations, the vacation pay can be automatically allocated to the pay period(s) to which it belongs by entering the appropriate pay period in the For which pay period list box on the Employee Timesheet page.

General instructions for adjusting Employee EI History are available in Adjust insurable earnings history.

Read this page if:

  • the employee is taking time off for vacation, AND

  • the vacation time begins in one pay period and ends in another.

Hours and Earnings Entries

If you are requesting vacation pay from either the Hours or Earnings entry section, you can select the correct pay periods from the For which pay period list box. Enter the appropriate amount of vacation pay on different lines if the vacation is to be allocated to two or more pay periods.

Note: Powerpay automatically calculates both the amount of insurable hours and insurable earnings.

Accumulator Payout

If you are paying out the entire accumulator for the employee's vacation time taken, AND where the time taken begins in one pay period and ends in another, you will have to reallocate the employee's EI History (Payroll > Adjustments > Insurable Earnings History).

Note: If the employee's province of employment is Quebec, the same process applies to QPIP History.

  1. If the employee has current pay, request a preview of your payroll after making your payroll entries.
    1. Go to the Request page.Closed From the Process menu, select Preview > Request.
    2. Click Request Preview.
  2. Find the employee's vacation pay dollar $ amount.
    1. Click Process > Preview > Employee Totals.
    2. Click the employee's name to view the Employee Details page for that employee.
    3. Record the values for (a) current vacation earnings (this is the insurable earnings value), and (b) the Hrly EQ (hourly equivalent).
  3. Manually calculate the total insurable hours. Divide the insurable earnings value by the employee's hourly rate of pay. This is the insurable hours value. Accuracy should be to two decimal places.

    Note: Insurable hours is the calculated value, NOT the number of hours the employee is on vacation.

  4. Evaluate which hours and earnings belong to which pay periods. Accuracy should be to two decimal places.
    • Calculate the portion of insurable hours that need to be moved to the pay period(s) OTHER THAN the designated pay period.
    • Calculate the portion of insurable dollars that need to be moved to the pay period(s) OTHER THAN the designated pay period.
  5. On the Insurable Earnings History page (Payroll > Adjustments > Insurable Earnings History), enter the adjustment values you calculated in step 4 to reallocate insurable hours and earnings to the different pay period(s).
    1. Click Payroll > Adjustments > Insurable Earnings History.
    2. Select the employee from the Employee List.
    3. From the Action to be taken list box, select REALLOCATE.
    4. Click Go.
    5. From the Move from which Pay Period list box, select the pay period (where you designated the vacation pay).
    6. From the Move to which pay period list box, select the pay period to which you want to move the insurable hours and earnings.
    7. Enter the Insurable Hours you want to move from the designated pay period (to 2 decimal places).
    8. Enter the Insurable Earnings you want to move to the designated pay period (to 2 decimal places).
    9. Click Save.

      Note: This creates a negative value for the designated pay period in both insurable hours and earnings because the payroll has not yet been processed. When you submit the payroll for processing, Powerpay combines the hours and earnings values with the negative balance from your adjustment to evaluate the correct number of insurable hours and earnings for the designated pay period.

  6. Repeat the REALLOCATE option if there is another pay period, which needs to have insurable hours and earnings moved to it.

Note: The Employment Insurance legislation states that, if NO time is taken for vacation pay, ONLY dollars are insurable and those dollars are insurable for the pay period in which they are paid. Therefore you do not have to make any EI Adjustments if the employee is not taking time off for vacation. (The same rule applies to QPIP History).