Annual Leave Calculation

Every employee who works for at least three months is entitled to prorated annual leave. The entitlement is based on calendar days. Global Payroll for Malaysia comes with an absence entitlement for the calculation of annual leave entitlement. The element ANN LVE ENT calculates leave on a per segment basis. Leave entitlement is based on the years of service within the organization.

Note: No fixed legislation exists to carry over entitlement. Generally, leave balance from one year cannot be carried over for more than two years.

The annual leave entitlement element ANN LVE ENT uses the formula ANN FM ENT FM to calculate leave on a pay segment basis (returning the period annual leave entitlement during the period accrual process). The leave entitlement is based on the years of service within the company.

The formula ANN FM ENT FM resolves like this:

  1. The annual leave entitlement value is retrieved from the bracket LVE BR ANNENT.

    This annual leave bracket defines the entitlement that an employee can earn in each month of service. The bracket is used when calculating the entitlement on a per pay segment basis. The bracket search keys and return column values are (after the completion of (x) months of service, an employee is entitled to x days of leave):

    Months of Service (LVE VR SERVICE MTH)

    Days of Leave (LVE BR ANNENT)

    24

    8

    60

    12

    99999

    16

  2. The formula ANN FM ENT FM uses the variable LVE VR SERVICEMTH to return the employee's length of service.

    The length of service is determined by comparing the results of the durations CMN DR SRVSEGBGN and CMN DR SRVSEGEND. Note that the payee's length of service is broken by periods of leave without pay.

  3. Accumulator LVE ENTPROB stores the annual leave entitlement during the three months after the hire date. The entitlement is moved to the ordinary annual leave accumulator at the end of this period.

  4. The outstanding leave balance is paid off on termination.

  5. Formulas LVE FM ENCASH, earning LEAVE ENCASH, and variable LVE VR ENCASHMTH enable you to automatically turn an unused previous year balance into cash. Variable LVE VR ENCASHMTH determines the month of payment. As delivered, it pays half of the outstanding balance in June.

  6. Formulas ANN FM UNUSEDENT and ANN FM PAYUNUSED, earning ANNLVEUNUSED, and variable ANN VR PAYUNUSED enable you to automatically forfeit unused leave. These elements calculate the end-of-year balance. The variable determines whether to pay or forfeit the amount.