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How to run the last pay for a leaving employee and to include accrued annual leave in that pay run.

Step-by-step guide

You will need to accrue leave to the last day of their employment (this will be easier to do manually), for example it you need to accrue leave to 24 August 2018:

  1. Go to Parameters > Set Parameters > Payroll > Processing Options.  Untick the the Raise Leave Accruals field.   Then go to File > Reset Login Settings.

  2. Go to Payroll and Personnel > Payroll Processing > Raise Leave Accruals.  You will need to run this from the relevant employee number to the employee number only; Leave Type will be LA - Annual Leave; Accrue to Date will be 24/08/18 and Annual Days to Accrue is 20.  You can run this in List Only mode first to ensure that the hours accrued look fine.  You then run this step again and select Update.   This will then give you the Accrued Annual Leave to 24 August 2018.

3. Once you have Updated the emplyees leave, go back to Parameters > Set Parameters > Payroll > Processing Options.  Tick the the Raise Leave Accruals field.   File > Reset Login Settings.

4. Go to the leaving employees Employee Record > Leave button.  This will then show you the total hours of Leave accrued as a negative amount, which is what you owe the employee.  Take note of the hours. 

Payroll Processing.

  1. Generate the pays as per normal and make any changes as necessary to any other employees.

  2. For the leaving employee, you will need to Modify their timesheet entry.  Make any other adjustments as required e.g. ordinary hours etc.  You will need to Add another Pay Item.  The Pay Code will be Annual Leave e.g. HLA; the number of units will be the Unused Leave that has been accrued as above.  The Gross Amount will then calculate as per normal.  Please take note of the Gross Amount as you will need to make an adjustment to Superannuation. 

  3. Process pays as per normal.

Superannuation Adjustment

For any unused leave that is paid out on termination/resignation it is not considered ordinary times earnings, therefore superannuation is not calculated on this figure.  However in LawMaster the HLA is considered Normal Pay and therefore calculates superannuation.   A Superannuation journal needs to be added to reverse the calculated superannuation on the unused leave component. 

From the gross amount of the unused leave, calculate 9.5% of that amount.  This will give you the SG contribution on that amount.  Let's say the unused leave component gross is $5,000; x 9.5% = $475.

On the leaving employees Employee Record, go to the Super tab.   Right click and Add.  Leave the date as at 24/8/18.  Reference No. can be anything you want e.g. adjust.  Narrative could be e.g. Adjusted Super not OTE on Unused Leave; Amount = negative -$475.00 (SG Contribution); Ordinary Pay = negative -$5,000.00 (Gross Amount of Unused Leave); Select OK.  

You can then audit your pays and print pay slips as per normal.   Once you have finalised the leaving employees pay, remember to terminate them in payroll and LawMaster Security. 

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