Examples of Custom Pay Types
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      Giving Additional Vacation Days as a Bonus

      This example explores options for recording gifted one-off additional vacation days.

      Updated: October 2024

      You are providing some additional paid vacation days to your employees this year as a one-off bonus, above the usual leave governed by the Holidays Act.
      Let's look at some recording options:

      Info - Blue Block (1)

       

      		 The Holidays Act governs the 4 weeks of Annual Leave and there are strict rules regarding how that is paid and taken. However, an employer is allowed to provide extra leave above the 4 weeks. This extra leave is by agreement and can be outside the Holidays Act rules.

      Please Note: Do not add additional Bonus Leave as Alternative Leave because of the way that legislation calculates its payment.

      Additional Vacation Days Without Touching Allocated Leave Balance

      • Extra vacation days can be monitored and given outside the payroll system, simply booked on a work calendar (similar to arranging a late start or taking time in lieu)
      • If you want to record this on the Payslip for clarity and tracking (or to add that special touch of celebration to the Payslip), create a custom pay type for this.
        • Custom pay types can be tracked through Pay Type Reports, so it is easy to see who took how many of their additional vacation days.
      • Useful tip: Have this leave limited to a specific period of time, or applied to the first leave requested so it is easy to keep track of. Also, communicate the terms clearly, i.e. that it is to be taken, not paid out or cashed up.

      This allowance is:

       ❌  A regular payment I can use system pre-loaded pay types for.
       ✅ I prefer using a custom pay type for clarity on the payslip or/and reporting and tracking purposes.
       ✅  This is a payslip note, so 'zero-value' pay type.

      The custom pay type & timesheet should have the following:

       ✅  Custom pay type created in the non-taxable section
       ✅ Rate: 0 | Per: unit | 'zero-value' payslip note
       ✅ Days noted on timesheet as applicable

      Here is an example setup:

      CPT_BonusLeaveZeroRateAllowance

      • Create this custom pay type with a recognisable name in the Employee Profile - Pay Types tab and SAVE.
      • In the timesheet, keep the standard pay entry for the day of additional leave so the employee is paid their usual pay for that day (see the yellow blocks).
      • In a new row, select your recognisable pay type from the dropdown timesheet list.
      • Enter a 1 to record the additional gifted vacation day taken.
        • You will see that the value for this entry is $0, as this is a note.
      • The timesheet summary will show the normal pay for this week.

      Additional Vacation Days added to the Allocated Leave Balance

      • If you add this gifted leave to the Allocated Leave Balance, this will need a Leave Balance Adjustment so this gifted leave can be taken at any time and will form part of a Final Pay.
      • You must update the employee's Leave Balance weeks by adding the gifted weeks.
        • Note: The Holidays Act calculates in weeks for Annual Leave, so you have to calculate in terms of the employee's workweek to add the gifted additional leave.
      Info - Blue Block (1)

       

      		 Contact our team to backdate this setting to the last leave allocation date. This will update the employee's leave balance with the additional gifted weeks.
      • After that change, the leave setting will be reset to the original leave setting for the next anniversary allocation. 
        • This will keep the gifted addition one-time only and not added at every leave anniversary.
      • This leave will pay out in a Final Pay.

      Further Resources