Understanding Leave Liability Reporting
The data that the report process extracts for leave liability reporting can be transferred to the GL through the GLI and included in the QSP financials file.
The reports, the interface, and the QSP file depend on data that is created the same way as any other data that's used for reports, the GLI, or the QSP file generation—by the use of Global Payroll rules.
Note: In this section, unless otherwise stated, the term reported means printed on a report, available for transfer to GLI, and available for inclusion in the QSP file.
Liability and absence history are calculated and reported to assist in the administration of employee absences and leave. They are used to identify trends in absence and for costing purposes.
Note: Absence history and its associated report are not part of the GLI functionality.
See Global Payroll for Australia Reports: A to Z
Liability is reported for annual leave accrued in hours, annual leave accrued in days, and long service leave accrued in weeks and months. The values are calculated as earnings: LIAB ANN HRS, LIAB ANN DAY, LIAB LSL WKS, LIAB LSLFTM and LIAB LSLPTM. These earnings do not contribute to accumulator AUS GROSS.
When you run the liability report, the parameters include the element category. Earnings LIAB ANN DAY and LIAB ANN HRS are category ANN and LIAB LSL WKS, LIAB LSLFTM and LIAB LSLPTM are category LSL. Entitlement ANN ENTHPH does not currently have a corresponding leave liability earnings created and therefore will not be included in the report. The category value is assigned as a variable LVE VR CATEGORY entered as a supporting element override for each earning.
This section discusses how the following leave liability events are calculated:
Annual leave liability for hourly accrual.
Annual leave liability for daily accrual.
Long service leave liability for weekly accrual.
Long service leave liability for monthly accrual.
Leave liability reversal when the cost center changes.
Note: The term pro rata refers to accrued leave that the payee may or may not be entitled to take. Pro rata becomes entitlement on an anniversary, usually of the payee's hire date. Entitlement refers to leave that the payee is entitled to take and that may have once been pro rata leave. This PeopleBook makes this distinction because both entitlement and pro rata are referred to as entitlement in the system.
The calculation rule for LIAB ANN HRS is Unit × Rate, where:
Unit = Accumulator ANN ENTHRS_BAL
Rate = System element HOURLY RT
The calculation rule for LIAB ANN DAY is Unit × Rate, where:
Unit = Formula LVL FM ANN DYS VAL
Rate = System element DAILY RT
The formula LVL FM ANN DYS VAL adds the values of two accumulators, the day's entitlement balance, and the day's pro rata balance, ANN ENTDYS_BAL and ANN PRODYS_BAL.
The calculation rule for earning LIAB LSL WKS is Unit × Rate × Percent, where:
Unit = Formula LVL FM LSL WKS VAL
Rate = Formula AUS FM DAYS TO WKS
Percent = Bracket LVL BR LIAB ATT
Formula LVL FM LSL WKS VAL calculates the units of leave that the payee has by adding the Long Service Leave entitlement balance (accumulator LSL ENTWKF_BAL) to the Long Service Leave pro rata balance (accumulator LSL PROWKF_BAL).
Formula AUS FM DAYS TO WKS—the earning's rate—resolves to the payee's pay per week by multiplying his or her FTE (from the Job record) by the variable AUS VR WKLY VAL (set to 5.00; that is, a week is five days) by the employee's daily rate.
Bracket LVL BR LIAB ATT—the earning's percentage—returns a value based upon the payee's years of service and the attrition rates that apply. That is, for example, only 50 percent of payees who have five years of service will stay long enough to qualify for long-service leave.
This table lists the delivered values:
|
After Number of Years of Service |
Estimated Percentage of Payees Who Will Stay to Qualify for LSL |
|---|---|
|
5 |
50 |
|
8 |
75 |
|
10 |
100 |
The search key for the bracket is the formula LVL FM DUR IN YRS, which resolves the number of years the payee has served. The formula divides duration LSL DR DYS FR HIRE by the variable LVL VR DAY IN YEAR (set to 365.25) to convert the duration in days to a number of years.
The duration's From date is LVE FM ACCR ST DT, which determines whether to use the payee's hire date or rehire date in calculating the days of service (it uses rehire date if it is later than hire date). The duration's To date is the period end date.
After determining the number of years of service, the bracket can return the value to use as the percentage in the earning's calculation rule.
After the three earnings are calculated their values are available for reporting, passing to GL by the GLI, or including in the QSP file.
The calculation rules for earnings LIAB LSLFTM and LIAB LSLPTM, the monthly full and part accruals, are Unit × Rate × Percent, where:
Unit = Formula LVL FM LSL MTHFTV and LVL FM LSL MTHPTV, respectively
Rate = Formula AUS FM DAYS TO MTH
Percent = Bracket LVL BR LIAB ATT
Formula LVL FM LSL MTHFTV calculates the units of leave that the payee has by adding the Long Service Leave entitlement balance (accumulator PSH LSLENTFT_BAL) to the Long Service Leave pro rata balance (accumulator PSH LSLPROFT_BAL) for the Full Time leave.
Formula LVL FM LSL MTHFTV and LVL FM LSL MTHPTV calculates the units of leave that the payee has by adding the Long Service Leave entitlement balance (accumulator PSH LSLENTPT_BAL) to the Long Service Leave pro rata balance (accumulator PSH LSLPROPT_BAL) for the Part Time leave.
Formula AUS FM DAYS TO MTH—the earning's rate—resolves to the payee's pay per month by multiplying his or her FTE (from the Job record) by the variable AUS VR MTHLY VAL (set to 30.00; that is, a month is thirty days) by the employee's daily rate.
The attrition rates bracket is the same as that used in the LSL weekly accrual.
The Leave Entitlements process determines if there is a change of ChartField for each employee—where ChartFields represent cost centres such as department and pay group. When the program detects a change, it reverses the liability from the centre storing the processed liability and sends the full amount of the new (unprocessed) liability (not the difference) to the new cost centre.