Frequently asked leave questions
Leave is calculated based on days and not on a monthly period. Legislation affords employee leave based on days worked and not calendar months. Other software uses the average days per month (365 รท 12) and this has resulted in the employer or employee being short-changed consistently. The variance from one month to the next is minimal, but it makes sense if you follow the for every number of days worked rule as determined by law. This can be overridden with the monthly override field in leave types under settings and if this has a value, the employee override default allowance will also be considered monthly rather than cycle length.
To automatically add remuneration for leave on termination may cause some employers to be out of pocket because not all leave should always be paid out as annual leave expires after 18 months according to South African labour law and some employers, although they would allow the employee to still take it after 18 months, do not pay it out on termination. Thus, we allow editing of payslips after termination but before requesting the EMP201 report. The termination popup however does show values of any leave and loan balances to help make the process smoother.
After you created the first payslip for the relevant employee, the leave opening balance date cannot be changed. This is because leave has already been calculated from the leave opening balance date to the end date of the new payslip. This is also why we give notices on the new employee popups regarding leave opening balances.
Leave cycles ALWAYS start from the employee's appointment date. Leave cycles starting before the leave opening balance date should generate zero earnings. Other factors include the fields in the leave type settings: Default allowance, Cycle length, Cycle expiry, Qualification, Pro rata before cycle qualification, Pro rata after cycle qualification, and Monthly override.
There are a few rules applicable to setting up leave types: Cycle qualification can't be more than the cycle length, Cycle length must be more than zero, If cycle qualification is less than cycle length, pro rata after cycle qualification will be No, and If pro rata after qualification, then also pro rata before qualification. You must also note these rules aren't just applicable to the number fields, but also the length dropdowns which are in days, months, or years. 2 months will be regarded as shorter than 1 year and may reject some settings you modified to comply with the rules.
The "Override default allowance" under the Opening Balances tab in the Employee's profile takes preference. If the payslip is for a full month and there is a value in the monthly override under leave types - then the "Override default allowance" will be divided by 12, otherwise it will be converted to a daily pro rata basis.
You have a few options: First option, Remove the employee's pay frequency from her profile so that no payslips are generated. However, once you generate payslips again you have to override the leave earned as it will calculate leave from the to date of the last payslip to the to date of the new payslip when returned. Second option, Terminate the employee and make maternity the reason. You then have two options on rehiring the employee: 1. Clear the termination date once returned, but again override the leave earned as above. 2. Rehire the employee and update the leave opening balance date and quantities in her Opening Balances tab in her employee profile. If you terminate and rehire, two IRP5s will be generated in the same financial year. If you prefer one IRP5, then clearing the pay frequency (setting it on Please Select) or terminate and clear termination date and reason would be best.