Note: The following functionality is intended specifically for certain sectors of the Australian market.
The Leave Loading Bonus Rule allows managers to pay a bonus to employees who work more than their assigned weekly hours on average (that is, their normal weekly hours as set up in the employee’s HR record). Leave loading refers to a bonus paid over the employee’s base rate for time away from work. It’s intended to account for the fact that an employee’s pay often has an overtime component, and so their time away should get a somewhat higher rate.
For example, an employee’s normal weekly hours are 38, but they consistently work 50 to 60 hours a week. The employee’s base annual leave (that is, vacation) accrual rate is calculated based only on their normal weekly hours (that is, 38 hours), so this bonus is added to compensate them for working more than 38 hours on average.
When an employee takes one day of vacation (or leave), this rule calculates and pays out a bonus to the employee based on whichever of the following two calculations is greater:
- Average overtime pay for the past week (sum of 1.5x and 2.0x overtime payments) divided by the employee’s normal weekly hours and multiplied by the number of hours being paid for annual leave (for example, one day = 7.6 hours as defined by the time away from work pay adjustment).
- Number of hours being paid for annual leave this week (for example, one day = 7.6 hours as defined by the time away from work pay adjustment) multiplied by the employee’s current rate of pay and then multiplied by a specified percentage.
| Setting | Description |
|---|---|
| Leave Loading Premium Rate (%) | Specify what rate, as a percentage, is used to calculate the premium awarded. |
| Pay Codes Eligible Pay Codes not eligible Pay Categories eligible Pay Categories not eligible |
Specify which pay codes and pay categories are included or excluded from this rule. |
| Include Premium | Select this checkbox to include premiums marked with eligible pay codes when calculating worked time. |
| Pay code to assign to premium Pay category to assign to premium |
In the drop-down lists, specify which pay code and pay category the rule assigns to any pay premiums it creates. |
| Pay Codes eligible as OT Amount Pay Codes not eligible as OT Amount |
Select which pay codes mark eligible and ineligible overtime. Pay details with one of the eligible pay codes are considered by the rule and count towards the overtime calculated, while ineligible pay codes are ignored. Leave these settings blank and the rule doesn’t consider pay codes when determining eligible and ineligible overtime. |
| Pay Categories eligible as OT Amount Pay Categories not eligible as OT Amount |
Select which pay categories mark eligible and ineligible overtime. Pay details with one of the eligible pay categories are considered by the rule and count towards the overtime calculated, while ineligible pay categories are ignored. Leave these settings blank and the rule doesn’t consider pay categories when determining eligible and ineligible overtime. |
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If any of the overtime pay codes from the previous settings list are paid out as separate premiums rather than as blended rate, then these separate premiums must be added here. This is because these items need to also have the original pay rate for the non-overtime portion of the hours worked added back into the calculation. |
| OT Calculation Period Type | Select which overtime calculation period type to use: Week or Day. |
| # of Past Periods included for OT Calculation | Specify the number of past days or weeks to include in the overtime calculation. The default is 1. For example, if 3 is entered in this field and Week is selected in the OT Calculation Period Type drop-down list, the rule will examine the employee’s overtime for the last three weeks to determine bonus eligibility. |
| Calculate Adjustment as Discount Code | Select this checkbox to configure the rule so that any premiums it pays out lower the weekly overtime thresholds of the Weekly Overtime Rule and cause employees to earn overtime after working a shorter amount of time. |
| Only award amount over base rate |
Select this checkbox to pay out the bonus as a separate premium instead of blending it into a user’s pay. When the checkbox is selected, the premium created only contains the actual bonus paid over and above the base rate. When the checkbox is cleared, the premium created by the rule contains both the base rate amount for the pay adjustment hours plus the leave loading bonus amount. The checkbox is selected by default. Because overtime is paid out at time-and-a-half, enter 1.5 in the Rate value for overtime field. Because this time-and-a-half is a multiple of the employee’s regular pay rate, set the Rate type to Multiplier. This is paid instead of the regular rate, so BlendedRate is selected for the Rate output. |