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Region: This article is for all Deputy customers except those with Australian accounts. If your account URL ends in Features: Some of the features described in this article may not be available on your current Deputy plan or may require an add-on. See Introduction to Leave Management for a breakdown of available features by plan. |
This article covers:
- Background
- Set up a leave policy that calculates average working hours
- How does it work?
- How is the leave value calculated?
- Partial day leave requests
- For UK businesses
- Additional notes
Background
If your team members are entitled to a specific number of days or weeks of paid leave each year but don't work the same regular hours from week to week, it can be difficult to calculate a day's or week's hours for leave purposes.
When configuring leave policies, you can choose to calculate the average working hours in a day for a team member over a specific period. Deputy then uses the calculated average working hours when determining the hours for their leave request.
Set up a leave policy that calculates average working hours
To set up a leave policy that calculates average working hours for team members who don't work fixed hours:
- Edit an existing leave policy or set up a new leave policy.
- Configure the leave policy as described in How to set up leave policies.
- In Additional options, select Calculate average working hours.
- Configure the reference period and maximum lookback period to suit your organization's leave requirements.
- Save the leave policy.
- Assign the leave policy to the relevant team members.
By default, Deputy calculates average working hours using the most recent 52 weeks containing paid work. If some weeks don't contain paid work, Deputy can look back as far as 104 weeks to find the most recent 52 weeks containing paid work.
You can change these values to align with your organization's leave policies.
After a team member has five pay-approved timesheets in Deputy, their average working hours will begin to be calculated for the leave policy.
How does it work?
When a team member requests leave using a leave policy configured to calculate average working hours, the request is sent to their manager as usual.
When reviewing the request, the manager can see the length of the average working day calculated by Deputy. In the example below, Sam has requested one day of leave and Deputy has calculated the average working day as 5 hours and 20 minutes.
For a full-day leave request, the start and end times are grayed out. The manager can't edit the start time, end time, or length of the leave day because Deputy calculates the average working day.
The amount shown when the request is approved is an estimate until the day the leave is taken.
A tooltip appears when you hover over the clock icon next to the calculated hours. This explains that the total hours per day are calculated using pay-approved timesheets from the configured reference period.
Because the calculation uses a team member's pay-approved timesheets, the calculated hours may change between the date the leave request is approved and the date the leave begins.
The final average working hours calculation is applied on the first day of leave. If the team member works significantly different hours between the leave being approved and the leave being taken, their calculated average working hours may change.
You can see the final hours calculated for the leave in the Approved Timesheets tab.
Note: The time on the leave request is displayed in hours and minutes, while the timesheet displays hours as a decimal. For example, 5 hours and 22 minutes is displayed as 5.37 hours on the timesheet.
How is the leave value calculated?
Deputy calculates the leave value using the total hours from pay-approved timesheets in the configured reference period divided by the total number of workdays in that period.
1. Determine the reference period
By default, Deputy uses the most recent 52 weeks containing paid work. You can change the reference period in the leave policy's Calculate average working hours settings.
2. Gather the total hours from timesheets
Deputy adds the total hours from the team member's pay-approved timesheets within the reference period.
3. Count the workdays
Deputy counts the actual workdays represented by the team member's pay-approved timesheets during the reference period.
4. Calculate the average hours
Deputy divides the total hours by the number of workdays to calculate the team member's average working hours for a day of leave.
5. Apply the calculation to leave requests
When the team member takes a full day of leave, Deputy uses the calculated average working day to determine the hours of leave.
Note: If a team member has an irregular work pattern or doesn't yet have a complete reference period of timesheet data, Deputy calculates the value using the available data. The calculation will become more representative as additional pay-approved timesheet data is collected.
Partial day leave requests
Team members can also request part of a day rather than a full day of leave.
When submitting the leave request, the team member selects the start and finish times for the period of leave.
When the manager reviews a partial-day leave request where All day isn't selected, they can review and amend the start and finish times if required before approving the leave.
For partial-day leave requests, the number of hours approved by the manager remains fixed for the leave timesheet.
Unlike a full-day leave request that uses a reference period to calculate average working hours, the hours for a partial-day request aren't recalculated on the day the leave is taken.
For UK businesses
The average working hours feature can help UK businesses manage holiday for team members whose working hours vary. The feature was developed with UK holiday pay requirements in mind, including the use of a reference period for workers without regular hours.
Most workers in the UK are entitled to 5.6 weeks of paid holiday each year, or the pro rata equivalent where applicable. How a week's pay is calculated can depend on the team member's working pattern and how they're paid.
| Working pattern | How a week's pay is calculated for leave |
| Fixed hours and pay (full or part time) | The worker's regular pay for the week |
| Shift work with fixed hours (full or part time) | The average number of weekly fixed hours worked in the previous 52 weeks, at their average hourly rate |
| No fixed hours, including casual and zero-hour contracts | The worker's average pay from the previous 52 weeks, counting weeks in which they were paid |
For UK holiday pay calculations:
- A week usually runs from Sunday to Saturday unless pay is calculated using a different seven-day period.
- If a team member wasn't paid during a week, that week can be excluded and an earlier week used instead. You can look back a maximum of 104 weeks to find 52 weeks in which the team member was paid.
- If the team member has less than 52 weeks of paid work, the average can be calculated using the weeks they have worked.
Deputy's default reference period of 52 paid weeks, with a maximum lookback of 104 weeks, is designed to align with Deputy's interpretation of these UK requirements.
For more information, see the UK government's guidance on holiday pay and calculating holiday pay for workers without fixed hours or pay.
Make sure you consider the requirements that apply to your business when configuring the reference period and other leave policy settings.
UK Holiday Policy (Zero-Hour)
Deputy accounts in the UK may include a default leave policy called UK Holiday Policy (Zero-Hour) for team members who don't work fixed hours or who are on zero-hour contracts.
You can use this default policy as a starting point and configure it to suit your organization's requirements, or create a new leave policy.
When using Calculate average working hours, the default 52-week reference period and 104-week maximum lookback align with Deputy's interpretation of UK requirements. You can change these values where required for your organization.
Additional notes
There are a few things to keep in mind when using the Calculate average working hours setting:
- The average working hours calculation rounds up to the nearest minute to avoid under-calculating a team member's leave.
- The calculation uses the team member's pay-approved timesheets within the configured reference period.
- The calculation takes into account average working hours, not the team member's average pay rate. Deputy creates the leave timesheet using the team member's current regular pay rate. If the team member's pay rate has varied significantly during the reference period, the average pay rate may need to be calculated separately and the timesheet amended where required.
- When average working hours are enabled, the same number of days of leave may represent a different number of hours for different team members. This is because the standard hours for each day of leave are calculated using each team member's average working hours. Read more about how Deputy determines the length of a standard day when managing leave.