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Bookkeeping – Holiday/Annual Leave Payout deducts from the Accrual, but Holiday Cash Out doesn’t – Why?

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Bookkeeping – Holiday/annual leave payout deducts from the accrual, but holiday cash out doesn’t – Why?

Bookkeeping – Holiday/annual leave payout deducts from the accrual, but holiday cash out doesn’t – Why?

Client Skype’d Hi Paul, I’ve had a look and our special Pay Category, Holiday Cash Out doesn’t seem to be deducting from the balance of Holiday Leave Accrual. It’s not listed under entitlements under the Payroll Category List window.

Answer – Yes it is NOT linked to the accrual because only one can be linked at a time to a pay category – the Holiday/Annual Leave pay category that is regularly used, is linked to the Holiday Accrual and deducts from the accrual – if you go to Entitlements, and then open the Holiday Leave Accrual, you will see down at the bottom it says it is linked to Holiday Leave.

Your Holiday Cash Out is not an entitlement – it will be under the Wages Payroll Category to be used when paid :), but it has no effect on the accrual.

Client Skype’d – Thanks. So how do we reduce the accrued holiday leave by the hours that have been paid as a holiday cash out which is allowed in the award, up to 2 weeks per year? Can we put it as an entitlement that gets deducted or can we manually deduct from accrued holiday pay?

Answer – It needs be manually deducted – the more automatic way is to set up the Hol Cash Out as a separate entitlement, and choose to link it to the Holiday Cash Out wage category.

BUT – If the 2 weeks are optional it will be difficult to balance with the regular Holiday accrual if not taken every year – it becomes messy – if not used regularly but occasional years.

I would adjust the Accrual in this way – do a paycheque with ZERO hours, and in the lower lines at Holiday Accrual, adjust the holiday accrual with NEGATIVE the hours cashed out, and write a note in the memo for the reason and date the cash out occurred, there should be no super generated, ensure any other allowances etc are ALL ZERO also – then record, and this pay updates the accrual and there is a clear record with note and date for the reason for the adjustment.

Client Skype’dOK I will try that. There’s only a few done so far. So will need to do that for those ones. May make an adjustment today so these are all done now and up to date. Thanks.

Answer – Yes, do as a pay, then it updates and provides a note and proper record on the staff pays record.

Client Skype’d –  Thanks. Is the other option to use the “Unused Holiday Pay” for Cashed Out pay as well?

Answer – NO Unused is for a different reason – when they leave and still have Unused Leave owing due to them on leaving. The Unused Holiday will ALSO NOT decrease the Holiday Accrual, but it is used to be clear what the pay is for – and when you enter the Termination Date in the card it closes OFF the entitlements.

Client Skype’d –  OK thanks. Thought I’d check. Will org. Cheers.

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Author: accountkeepingplus

Administration, bookkeeping and compliance for small business, Training, trouble-shooting, or we can do the books and payroll for you! Self Managed Superannuation Fund Service Provider, free support MYOB Certified Consultant, Reckon/QuickBooks Professional Partner.

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