How do I prepare average holiday pay rate settings?

You can calculate an hourly rate or daily rate at which to assign to holiday pay. This rate is based on the average rate of pay accumulated over several historical periods.

 

When calculating the average rate of pay, Cintra iQ considers:

1. The number of historical periods required. 52 weeks (or 12 periods) is the default period on which to base your calculation, but it can be changed. When an individual has not been employed for the full period set, the calculation takes into account the number of existing periods of pay associated to the individual.
2. Relevant pay for each historical period. For more information, see How Do I Determine Relevant Pay? 
3. Number of contractual hours/days within each historical period. For more information, see How Do I Set Contractual Hours/Days?

To obtain the employee's holiday rate based on the average pay, Cintra iQ divides the total relevant pay, by the total number of contractual hours for the number of weeks/periods as set up in the payroll.

 

 

  Note:

Closed payroll periods: The average holiday rate calculated only takes into account closed payroll periods.

 

Before you can calculate an employee's holiday rate, you must determine the following:

• How many periods of history you wish to collect.
• Whether specific periods should be excluded when pay falls below a certain level.
• How many periods to include in the extended history if certain periods were excluded.

To prepare the average holiday pay rate settings

1. Navigate to the Employers window.
   Go to Cintra iQ: Payroll> Payroll Setup> Employer Setup> Employers definition window
2. Double-click the desired Employer definition. The company's window appears.
3. Select the PAYE & Payrolls tab.
4. Double-click the desired payroll entry within Payrolls associated with the selected PAYE Scheme. The Payroll window appears.
5. Select the Additional Settings tab.
6. Navigate to the Holiday Pay Rate Calculation Settings section.
7. Select one or more of the following options. Once complete, click OK. You are now ready to set up Addition Headings. 

 

Name	Description
Holiday Rate Period:	Select Weeks if the contracted hours are held per week. Select Periods if the contracted hours are held per month.
Periods required:	Enter the number of retrospective periods you need to include to calculate the average holiday rate. Typically, this is 52 if the Holiday Rate Period is weeks. It will be 12 if the Holiday Rate Period is months.
Exclude Zero Pay Periods:	Check this to exclude the periods that have no pay.  If any period contains zero pay, Cintra iQ can ignore these periods and calculate the holiday rates based on the remaining periods.
Exclude Periods Below Contractual Pay:	Check this to exclude the periods that are lower than contractual pay.    If any period is below the contractual pay, Cintra iQ can ignore these periods and calculate the holiday rates based on the remaining periods. For more information, see Determining Contractual Pay.
Apply Minimum Contractual Pay	Checked: The contractual pay is used as the gross pay for the period, when the gross pay is less than the contractual pay.  Unchecked: The look back calculation allows a period falling below contractual pay, to be skipped.
Recalculate Hourly Pay on Current Rate	Checked: Any hourly paid payment headings are examined for the rate of pay used, and compared against the current rate of pay as at the start of the current period. If the current rate of pay is greater than the rate used, the amount of pay is recalculated at the current rate of pay before being summed into the relevant gross pay for the look back period. The two figures of original gross pay, and recomputed gross pay are displayed in the Holiday Pay Rate window. This option applies to hourly pay only. Any other pay received in a cash amount (eg. SSP or Cash Bonus) is left as the original payment value.  Unchecked: The look back calculation will identify the relevant gross pay as paid during the look back period.
Base Contractual Pay On Current Rate	Checked: The contractual pay is the sum of employee standing payments as at the start of the current pay period. Where the payment heading selected is an hourly rate, the rate as at the start of the current pay period is multiplied by the contracted hours. Unchecked: The contractual pay is the sum of employee standing payments (for payment headings marked as contractual), for the look back period in question. Where the payment heading selected is an hourly rate, the rate as at the end of the look back week is multiplied by the contracted hours to establish the contractual pay.
Extend To Find Qualifying Periods:	Check this to allow the system to find qualifying periods for the holiday rate if some periods have been excluded.     Important:  Only check this option if either the Exclude Zero Pay Periods or Exclude Periods Below Contractual Pay option is selected.
Max Periods To Use	Enter the maximum number of historical periods upon which the system bases its calculation, if it is extending to find qualifying periods.     Important: Only enter a value if you want to extend the history. Ensure the Extend To Find Qualifying Periods option is selected.
Show Additional Periods for Information	Enter the number of periods to be displayed that are used to give extra information. This allows the user to assess and modify the employee's pay rate if necessary.
Pro Rata Basis for Gross Pay	When pay crosses a week or period boundary, and needs to be split over more than one week or period, this is the basis in which to calculate the pay split. It also defines how the contractual days are collected; if a daily rate is to be calculated. You can select either of the following from the drop down list. Calendar Days: (Default setting) The contractual days for a daily rate calculation is based on the number of calendar days in the period. The pro rata for gross pay is based on calendar days.  Work Days: The contractual days for a daily rate calculation is based on the employee's working days derived from their working pattern. The pro rata for gross pay is based on work days.  Week Days: The contractual days for a daily rate calculation is based on a Monday to Friday week. The pro rata for gross pay is based on week days.
Use Gross Pay	When picking up gross pay, the dates on the payment record are taken into account when splitting pay over more than one historical week/period . You can select either of the following from the drop-down list.  When Earned: Takes into account the dates on the individual payment record (addition segment) when allocating the pay to the relevant historic weeks/periods. e.g. You have a monthly payroll and choose to use three periods of historical pay periods . You enter holiday units for an employee's September payroll period. The previous three payroll periods cover June, July and August. The employee received overtime pay in June to cover the overtime worked from 1st to 15th May. When Earned, the overtime pay paid in June is not taken into account when calculating the holiday pay for September because the overtime was earned in May.  When Paid: Takes into account the dates on the payroll period in which the payment was made. e.g. You have a monthly payroll and choose to use three periods of historical pay periods. You enter holiday units for an employee's September payroll. The previous three payroll periods cover June, July and August. The employee received overtime pay in June to cover the overtime worked from 1st to 15th May. When Paid, the overtime paid in June is taken into account when calculating the holiday pay for September because June is part of the historical payroll periods.
Use this heading as minimum rate	Select an addition heading from this drop down list to specify a hourly rate payment for each payroll. When the hourly rate via the lookback calculation is made, there is a final comparison against the hourly rate held for the employee against the specified minimum payment heading for the payroll. If the value of the calculated lookback hourly rate is less than the rate held against the minimum heading, the rate held is applied as the rate of payment for the holiday hours.