Reporting Leave Liability
The data that the report process extracts for leave liability reporting can be transferred to the general ledger through the GLI.
The reports and the interface depend upon data that is created the same way as any other data that's used for reports, the GLI—by the use of Global Payroll rules
Note: In this section, unless otherwise stated, "reported" means printed on a report and available for transfer to GLI.
Liability (and absence history) are calculated and reported to assist in the administration of employee absences and leave. They are used for costing purposes and to identify trends in absence.
Note: Absence history and its associated report are not part of the GLI functionality.
See .Global Payroll for New Zealand 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 and LIAB ANN DYS. These earnings do not contribute to accumulator NZL GROSS.
When you run the liability report, the parameters include the element category. Earnings LIAB ANN DYS and LIAB ANN HRS are category ANN. The category value is assigned as a variable entered as a supporting element override for each earning.
The rest of this section describes how the system calculates:
Annual leave liability for hourly accrual.
Annual leave liability for the Holiday Act daily accrual.
The annual leave hours for reversal on termination.
The annual leave days for reversal on termination.
The salary accrual where pay end dates are not the same as financial period end dates.
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 or 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. We make this distinction in this documentation because both entitlement and pro rata (as we have just defined them) are called "entitlement" in the system.
The calculation rule for LIAB ANN HRS is Unit x Rate where:
Unit = Accumulator ANN LVE HRS_BAL
Rate = Formula LVE ORD FM RATE
The rate formula delivered returns the system element HOURLY RT.
The earning has generation control GLI GC LIAB which comprises formulas CMN FM MTH END and TER FM TERM CHECK. It first checks that it is the last segment of the last pay for the month and that the employee is active, and then checks if the employee is terminating in this pay run.
The calculation rule for LIAB ANN HRS is Unit x Rate where:
Unit = Formula LVL FM ANN LVE DYS
Rate = Formula LVL FM ORD DAY RT
The unit formula sums all the Holiday Act entitlement. The rate formula calculates the daily rate that is equivalent to the Ordinary Hourly Rate. This earning also has the generation control GLI GC LIAB.
The calculation rule for LIAB TER HRS is Amount where:
Amount = LIAB ANN HRS
This earning has the generation control CMN GC TERM STAT.
The calculation rule for LIAB TER DAYS is Amount where:
Amount = LIAB ANN HRS
Both these earnings have the generation control CMN GC TERM STAT so that they can be reversed out if the payee is terminated in the pay period.
The calculation rule for SAL ACCRUAL is Amount x Percentage where:
Amount = Accumulator NZL GROSS
Percentage = Variable GLI VR ACCRUAL PCT
The percentage variable holds the percentage you want to accrue. You add the variable as a calendar supporting element override on the last calendar for the month so the variable's override levels should be set to pay calendar. The value of the variable varies according to the gap between the end of the pay period and the end of the financial period.
This earnings has the generation control GLI GC ACCRUAL
The leave entitlements Application Engine program checks to see if there is a change of ChartField for each employee—where Chart Fields 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.