Payroll - Leave Loading

Setting up Leave Loading in Cashbook Payroll

NOTE: Full-time and Part-time permanent workers are entitled to a minimum of 4 weeks of paid annual leave for every 12 months of continuous service, based on their ordinary hours of work. Shift workers are entitled to 5 weeks of paid Annual Leave. 

Leave Loading:

1. Is an extra payment on top of an employees annual leave pay, to compensate them for expenses during annual leave.
   
2. It is usually 17.5% of your employees normal pay.
   
3. Is paid at your employees ordinary rate of pay when an employee takes annual leave. This does not include any overtime, penalty rates, allowances or bonuses.
   
4. You will only have to pay leave loading if it is outlined in your employee's award or workplace agreement. Visit the Fair Work Commission site for more information about an Award or Workplace Agreement for employees or call the Fair Work Info line on 13 13 94.
   

 To set up Annual Leave Loading

Step 1. Add a New Pay Rate item

1. Click on the Payroll toolbar option.
   
2. Click on the Setup Lists tab.
   
3. In the Pay Rates tab.
   
4. Click on the Add button, at the bottom of the screen.
   

 

• Setup Pay Item for Annual Leave Loading:
  

1. Name - Annual Leave Loading.
   
2. Per - select Pay from the drop down list.
   
3. Hrs/Units - leave blank.
   
4. Rate - 0.1750 .
   

Note: Day workers are usually entitled to a 17½% annual leave loading calculated on the ordinary weekly rate of pay

1. Super - Tick (Click on the following ATO link for more information: Ordinary time earnings - Annual Leave Loading or Super for employers >Checklist: Salary or wages and ordinary time earnings.>Leave).
   
2. Taxable - Tick (Any leave loading attracted by annual leave in an advance leave payment is to be added to the total leave payment when calculating the withholding).
   
3. Optional Cashbook Account - this will automatically default to Include with wages.
   
4. Click on the Allocate to radial dial if you have set up another account specifically for Leave Loading.
   
5. Click on the OK button to save.
   

Step 2 - Entering a Pay for leave in advance with Annual Leave Loading:

Example: Employee, John Brown, who is paid fortnightly, earns $1,000 a week ($2,000 a fortnight - 80 hours @ $25/hour) and is taking 4 weeks annual leave. He will receive a leave payment of $4000 for four weeks leave. The annual leave attracts leave loading at the rate of 17.5% per pay, which increases the total leave payment by $700 to $4,700.

Add the pay:

​Still in Payroll.

1. Click on the Employees Tab.
   
2. Double click on the employee you are adding the pay for.
   
3. Click on the Add Pay button.
   
4. Select Annual Leave from the Pay Type drop down list.
   
5. Per - Pay (Annual Leave should already exist as a Pay Rate as part of your original Cashbook setup).
   
6. Hrs/Units - 160 (John Brown work 80 hours/fortnight, 160 hours/4 weeks).
   
7. Rate - 25 (John Brown's normal pay rate).
   
8. Total - Will calculate at 4,000.
   

Note: Super and Taxable should be ticked

1. Next line:
   
2. Select Annual Leave Loading from the Pay Type drop-down list.
   
3. Per - Pay (auto-fill).
   
4. Hrs/Units - Enter the Total amount of the Annual Leave.
   
5. Rate - 0.175 (auto-fill).
   
6. Total - Will calculate to 700.
   

Note: Super and Taxable should be ticked

1. Click on Summary Tab.
   
2. Click OK to save.
   

1. Click Yes to the information message: 'Do you want to add this pay into your Cashbook.'
   
2. Click OK to record the transaction in Cashbook.
   
3. Click Yes if you receive the following Confirm message: 'There are dissections that have no amounts assigned. Do you want to remove these dissections before saving this transaction?'
   
4. Click on the Close button.