The following are a few examples of how to set up the Through Service Year table and the Calc Max. Carry-over based on Remaining Balance option on the on the Employee tab of the Earning/Deduction Codes for an accrual. The examples specifically describe vacation time accrual, but the principles would also apply to sick time accrual. For compensatory/banked time, you do not specify beginning and increment amounts. (The Employee tab becomes available only if you select Accrual in the Category field of the Basic Info tab.)
Example 1: Accrue once a year, with unlimited carry-over
Assume that:
- Employees do not accrue vacation time per pay period, but instead receive a flat amount of 15 vacation days (120 hours) at the start of every new accrual year, regardless of the number of service years.
- There is no limit to the number of vacation days that can be accrued or carried over.
In such a case, it does not matter whether you select the Calc Max. Carry-over based on Remaining Balance option.
Your table on the Employee tab of the Earning/Deduction Codes window would look like this:
|
Through Service Year |
Beginning |
Increment |
Max. Accrual |
Max. Carry-over |
|---|---|---|---|---|
|
99 |
120.00 |
0.00000 |
999,999.00 |
999,999.00 |
If employees are allowed to accrue only up to a certain number of hours (for example, 240 hours), then you would enter 240.00 in the Max. Accrual field.
Example 2: Accrue once a year, with no carry-over permitted
Assume that:
- Employees do not accrue vacation time per pay period, but instead receive a flat amount of 15 vacation days (120 hours) at the start of every new accrual year, regardless of the number of service years.
- Employees can accrue up to 120 hours at any one time.
- Employees are not permitted to carry over any unused vacation days.
In such a case, it does not matter whether you select the Calc Max. Carry-over based on Remaining Balance option.
Your table on the Employee tab of the Earning/Deduction Codes window would look like this:
|
Through Service Year |
Beginning | Increment |
Max. Accrual |
Max. Carry-over |
|---|---|---|---|---|
|
99 |
120.00 |
0.00000 |
120.00 |
0.00 |
Example 3: Accrue per pay period, without the Calc Max. Carry-over based on Remaining Balance option
This example illustrates a situation where:
- Employees can carry over the unused portion of vacation accrued during the current year, up to a specified maximum carry-over. (The company they work for allows them to roll over some of their vacation hours into the new period but encourages the use of most of it as needed breaks from the work world.)
- Employees can also carry over any unused vacation hours accumulated from past years.
Setting Up the Table
Suppose that vacation time is accrued depending on the years of service as follows:
- Three weeks (120 hours) per year, for an employee’s first five years of employment.
- Four and one half weeks (180 hours) per year, for employment years six through ten.
- Six weeks (240 hours) per year thereafter.
You would enter 5 in the first Through Service Year field, 10 in the second Through Service Year field, and 99 (or another appropriately high number) in the third Through Service Year field.
Suppose that, as a bonus for long-term employment:
- Employees with six through ten years of employment receive one extra day (8 hours) of vacation at the start of each accrual year.
- Employees with more than 10 years of employment receive two extra days (16 hours) of vacation at the start of each accrual year.
In the Beginning column, you would enter 0 for the first Through Service Year line, 8 in the second Through Service Year line, and 16 in the third Through Service Year.
Suppose you are accruing vacation for your employees by means of a monthly Hours Per Frequency accrual.
- Enter 10 hours as the monthly increment on the line that corresponds to Through Service Year 5 (120 hours divided by 12 pay periods = 10).
- Enter 15 hours as the monthly increment on the line corresponding to Through Service Year 10. (180 hours divided by 12 pay periods = 15)
- Enter 20 hours as the monthly increment on the line corresponding to Through Service Year 99. (240 hours divided by 12 pay periods = 20)
Suppose that:
- For employees with five or fewer years of service, you allow a maximum unused accrual of six weeks, or 240 hours. In the Max. Accrual field corresponding to the first five years of service, you would enter 240 hours.
- For employees with between six and ten years of service, you allow a maximum accrual of 9 weeks, or 360 hours. In the Max. Accrual field corresponding to service years six through ten, you would enter 360.
- Finally, for service years over ten, you allow a maximum accrual of 12 weeks, or 480 hours. In the Max. Accrual field corresponding to service years 11 through 99, you would enter 480.
Suppose that, of the vacation time accrued during the year:
- Employees in the first bracket (through service year five) can carry over one week (40 hours) of the 120 hours.
- Employees in the second bracket can carry over one and one half weeks (60 hours) of the 180 hours.
- Employees in the third and final bracket can carry over two weeks (80 hours) of the 240 hours.
In addition, assume that employees are also allowed to carry over any unused vacation accumulated from past years, regardless of the service year level.
To set this up:
- Enter 40 hours as the maximum carry-over for the first group, 60 hours for the second, and 80 for the third.
- Do not select the Calc Max. Carry-over based on Remaining Balance check box. If you do not select the option, you are instructing the payroll program to compare the maximum carry-over value with the employee’s unused portion of the hours accrued during the current year, and to also carry over any unused hours from the previous year.
Your table on the Employee tab of the Earning/Deduction Codes setup window would look like this:
| Through Service Year | Beginning | Increment |
Max. Accrual |
Max. Carry-over |
|---|---|---|---|---|
|
5 |
0.00 |
10.00 |
240.00 |
40.00 |
|
10 |
8.00 |
15.00 |
360.00 |
60.00 |
|
99 |
16.00 |
20.00 |
480.00 |
80.00 |
In summary, employees in the example given who have up to five years of service with the company accrue three weeks (120 hours) of vacation in a year. Of the three weeks they accrue, they must use two within each year or lose them, as they are allowed to carry over only one week (40 hours) per year.
Although these employees may eventually accrue up to six weeks (240 hours) of unused vacation time, their maximum annual carry over of one week means that it would take a minimum of six years for an employee to reach the maximum unused accrual ceiling. By that time, however, the employee’s maximum unused accrual ceiling would have increased to 9 weeks (360 hours) according to the Through Service Year 10 bracket of the accrual schedule.
Note that employees with more than five years of service receive an additional 8 hours (or 16 hours, if more than ten years), which is added after the maximum carry-over is considered. However, the result cannot exceed the maximum accrual.
Example 4: Accrue per pay period, with the Calc Max. Carry-over based on Remaining Balance option
This example illustrates a situation where, regardless of the employee’s total remaining balance at the end of the accrual year, the employee is not permitted to carry over any unused hours beyond the specified maximum carry-over.
Assume the same values entered in the Through Service Year, Beginning, Increment, and Maximum Carry-over fields as in Example 3.
In Example 4, you would set the following:
- Select the Calc Max. Carry-over based on Remaining Balance check box. Selecting this option tells the payroll program to compare the maximum carry-over value with the employee’s total remaining accrual balance, and carry over the lesser of the two.
- You would most likely set your Maximum Accrual values differently than Example 3. You should set them so that employees continue to accrue up to their yearly entitlement, plus the maximum carry-over. For example, for the first Through Service Year (5), you would set the maximum accrual to at least 160 (that is, 120 hours entitlement, plus 40 maximum carry-over).
Your table on the Employee tab of the Earning/Deduction Codes window would look like this:
|
Through Service Year |
Beginning |
Increment |
Max. Accrual |
Max. Carry-over |
|---|---|---|---|---|
|
5 |
0.00 |
10.00 |
160.00 |
40.00 |
|
10 |
8.00 |
15.00 |
240.00 |
60.00 |
|
99 |
16.00 |
20.00 |
320.00 |
80.00 |
In summary, employees in this example who have up to five years of service with the company accrue three weeks (120 hours) of vacation in a year. Of the three weeks they accrue, they must use two within each year or lose them, as they are allowed to carry over only one week (40 hours) per year.
However, unlike Example 3, these employees are more restricted in the number of hours they can carry over.
When you select the Calc Max. Carry-over based on Remaining Balance check box, the values you set in the Max. Carry-over column indicate the number of hours of the total remaining balance that can be carried over.
So, for example, employees in the first bracket (Through Service Year five) can carry over only 40 hours every year, and cannot carry over any other remaining unused hours that the employee may have accumulated. (In Example 3, the employee can carry over 40 hours of the total hours accrued during the current year, plus any remaining unused hours accumulated.)
Note: Employees with more than five years of service receive an additional 8 hours, which is added after the maximum carry-over is considered. This means that they may start the new accrual year with 68 hours (8 hours more than the specified maximum carry-over of 60).
Similarly, employees with more than ten years of service receive an extra 16 hours, so they may start the new accrual year with 96 hours (16 hours more than the specified maximum carry-over of 80).