(CA) Accrue or pay out vacation

The default vacation setting for all employees and contractors is 'Not applicable' and no vacation pay is accrued or paid out. 

If the employee is set to accrue vacation or pay it out, the vacation pay amount is calculated at the default rate of 4% or two (2) weeks of vacation in a calendar year.

Accrue vacation pay

1. Navigate to an employee’s Job tab.
2. In the 'Vacation' section, select "Accrue each pay" in the dropdown menu. Vacation pay will be held back i.e. accrued and the up-to-date vacation balance will be displayed in the Employees >  Employees tab.  Vacation balances are updated automatically when the balance is drawn down.
3. Override vacation accrual (default: No) – set the toggle to 'Yes' if you want vacation to be accrued at a different rate. 
4. Override percent – enter the rate without the % symbol. For e.g. 6.0 for 3 weeks of vacation, 8.0 for 4 weeks of vacation.
5. Click "Save changes."

Note: if an employee is set to accrue vacation originally and then switched to pay out vacation with each pay cheque, the accrued balance should be paid out in full before you change the vacation setting. 

Paying out accrued vacation

1. Navigate to an employee’s Income tab.
2. Click “Add income.”
3. Income type – dropdown menu will display all available earning types for the company. Select "Vacation pay."
4. Amount – enter the employee's vacation time off as a $ amount. Note: to enter the vacation taken in hours, enter the desired value in the 'Hours associated' field and the amount will automatically calculate once you click "Save income."
5. Frequency – select "Once on the next paycheque" as the payment frequency. You can also enter this payment when you process payroll by clicking the orange 'Add/remove income types' link.
6. Charge dept – select a department to allocate the earning type amounts for reporting, if applicable.
7. Hours associated – enter the amount of hours the employee used as vacation time off. 
8. Click "Save income" to add the vacation pay out to the employee's paycheque.

Note: you will need to manually adjust the current pay by this vacation pay amount. 

Pay out vacation on each pay cheque

1. Navigate to an employee’s Job tab.
2. In the 'Vacation' section, select "Paid out each pay" in the dropdown menu. The employee will receive their vacation pay due to them with each payroll. Vacation pay will be displayed on the paystub. 
3. Override vacation accrual (default: No) – set the toggle to 'Yes' if you want vacation to be paid out at a different rate. 
4. Override percent – enter the rate without the % symbol. For e.g. 6.0 for 3 weeks of vacation, 8.0 for 4 weeks of vacation.
5. Click "Save changes."

Vacation entitlements and rates

• Two (2)  weeks of vacation for every completed “year of employment” (typically based on the employee’s start date).
• After five (5) consecutive years of employment with the same employer, the entitlement increases to three (3) weeks.
• As percentages, the formula is 2% for each week of entitlement. To calculate a percentage that’s not outlined above, multiply the number of weeks of entitlement by 2%.
  • 4% = 2 weeks
  • 6% = 3 weeks
  • 8% = 4 weeks