Why is the Leave payout higher than basic daily rate?
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Why is the Leave payout higher than basic daily rate?
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Why is the Leave payout higher than basic daily rate?
Note that from mid 2019, Leave-Pay-Taken has to be based on the daily equivalent of the Gross-Pay and NOT the Basic-Pay of the particular month that the leave is cashed.
According to the in the new Employment Act (JULY-2019):
The only extra that is NOT included for the Daily Rate equivalent for "cashing of Leave" is the Bonus or Gratuity or Terminal Benefit End-of-Contract payments.
If you enter any value in the Bonus field then the leave Daily-Payout-Rate won't increase for leave pay out. All other extras are used to increase the basic daily pay rate when an employee cashes their leave.
To work out how its calculated in a typical scenario after you have processed the payslip:
Take the gross wage on the payslip and then subtract the Leave-Pay and then subtract the Bonus amount(if any) and divide the result by 26 to get the leave Daily-Payout-Rate.
There may be a Collective agreement that you have that could supersede this National Employment Act which allows for leave to be paid using the normal Daily pay-rate. If you are sure your Collective agreement is ratified by an official Labour Officer and that it is still valid, then you may change Harvester to work out "cashed leave" for Daily-Paid employees on the Basic Daily pay-rate.
Please go to Settings and then Company Settings and on the bottom right of the page tick the check-box for "Leave Rate on Basic". This will ensure that if an employee is not of the employee type Fixed but is of the type "Daily" and the employee wants to cash there leave then when you enter the "leave-days-taken" then it will multiple this by the Daily pay-rate and NOT the Gross-Equivalent Daily pay-rate.
Don't forget to recalculate by resubmitting any payment again where Leave-days were taken in order that the system works out leave on basic Daily rate.
Please check with your local Labour officer if your collective agreement will supersede the National Labour law. Some officers do not accept this.
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