How do I configure the Leave Provision component?

This feature is available on all PaySpace editions

One of the provisions of the BCEA is that annual leave can be taken when an employer and employee agree on the time/period of leave. Such an agreement is normally reached through the employer's internal leave application processes.

The Leave Provision component helps employers to project their liability to compensate employees for long service leave, annual leave, and other leave types in the event of termination of employment. It is a accepted accounting practice to record each month’s material provisions for leave pay based on the amount that would be payable to all employees, were they not to take leave as at that date but were instead to be paid out their leave entitlement in cash. A monthly-paid employee working five days a week will be entitled to a minimum of 15 days’ annual leave per year, which is calculated as 15 / 12 = 1.25 accrual each month.

The base of the component calculation is:

{EE Leave Days x [(System Default or Comp Income Base) / Days Per Period]} - Previous LTD Leave Provision

Use the following steps to configure the component:

Step 1: Add the Leave Provision component on company level. 

      Navigate > Configuration > Payroll > Payroll Config > Payroll Components

      

      

Step 2: Save the component (accepting the default calculation, which uses the BCEA income setup on the Leave Administration screen: ‘Leave Averaging Income Setup’.) or select "Click here to add Leave Pay Income to this component" (to set up your own income base on the leave provision component, based on your company  leave provision policy) and then select "Save".

      

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