The Vacation Pay Accrual Rate defines how much Vacation Pay an employee earns each pay period. Vacation pays are entered in PayrollHero as a percentage and is automatically calculated and deposited into an employee’s Vacation Bank on each payday. It is also calculated using the total earning of an employee during a pay period
Setting the Vacation Pay Accrual Rates
The vacation accrual rate is set on each position’s compensation grid as a percentage.
**This may also be overridden on the employees compensation grid in the employee profile.
You can determine the Vacation Pay Percentage Rate by dividing how many paid days off you want to give, by the number of working days that employee is expected to work in a calendar year.
Vacation Pay Accrual Rate = # of Vacation Days / # of Working Days in a Year
Let’s say that you want to give your employees 10 vacation days a year.
10 Vacation Days / 261 Working Days in a year = 0.038 or 3.8%
Note: There are 261 weekdays in a calendar year. Most companies use 261 as the figure for the expected work days of an employee in a year. Check out this article to learn more about it.
And that’s it! You now have successfully set your employee’s Vacation Pay Accrual Rate. You can also check out these related articles for more information: