If you have leave policies set up that accrue leave entitlements for your team over a set 12 month period, what happens when employees start part-way through that leave year?
Instead of having to manually calculate how much pro-rata leave these new starter employees are entitled to, Deputy can automatically do these calculations and apply the leave to your new starter's leave balance as a one-off action. See some examples.
- Before you get started
- Which leave policies I can configure to calculate pro-rata entitlements?
- What conditions must be met for the pro-rata leave to apply?
- How is the pro-rata leave calculated?
- Troubleshooting
Before you get started
Please ensure you:
- are logged into Deputy as a System Administrator
- understand how to set up leave policies
- have the hire date entered in the new starter's profile
Which leave policies I can configure to calculate pro-rata entitlements?
Not all leave policies you configure are eligible (nor relevant) for applying pro-rata leave entitlements to new starts you begin part way through a leave year.
As such there are two main types that you can set up that will calculate pro-rata leave entitlements:
1. Fixed annual accrual leave policies
When setting up fixed leave policies that release a fixed amount of leave every month or every year on a specific date you will have the option to tick the box to have pro-rata leave calculations apply.
Note: the pro-rata option is NOT available (nor relevant) if you configure the policy to release the fixed leave:
- every week or quarter
- starting on the employee's hire date
IMPORTANT: when you select the specific date for the fixed leave policy to start, please make sure the year you select is correct. If you accidentally select the upcoming leave year (instead of the current leave year) then the pro-rata leave will not be applied to any employees that join in the current leave year.
Once you have ticked the box to enable pro-rata leave entitlement click on View all pro-rata settings to expand the drop-down and further configure the pro-rata settings.
See below for more information on how these settings affect the calculation of pro-rata leave entitlements.
2. Accrual based on agreed hours over an annual period
Leave policies that calculate leave entitlements based on agreed hours over an annual period
When setting up leave policies that release leave based on agreed hours every year on a specific date you will have the option to tick the box to have pro-rata leave calculations apply.
Note: the pro-rata option is NOT available (nor relevant) if you configure the policy to release the accrued leave starting on the employee's hire date
IMPORTANT: when selecting the specific date for leave policy to start, please ensure the year you select is correct. If you accidentally select the upcoming leave year (instead of the current leave year) then the pro-rata leave will not be applied to any employees that join in the current leave year.
Once you have ticked the box to enable pro-rata leave entitlement click on View all pro-rata settings to expand the drop-down and further configure the pro-rata settings.
See below for more information on how these settings affect the calculation of pro-rata leave entitlements.
What conditions must be met for the pro-rata leave to apply?
For a pro-rata leave entitlement to be automatically calculated and applied to a new starter employee's leave balance as a one-off accrual, the following conditions must be met:
- the leave policy must be configured with the option ticked to enable pro-rata leave as described above with the leave being accrued over an annual period or 'leave year'.
- the employee must have the leave policy assigned to them in their profile
- the employee must have their hire date entered in their profile
- the hire date of the employee must fall within the configured 'leave year' of the leave policy.
How is the pro-rata leave calculated?
The pro-rata leave entitlement is equal to the (yearly leave entitlement) multiplied by (days or months in employment in the leave year) divided by (days or months in the year).
The pro-rata leave entitlement settings you configure will affect how the pro-rated leave is calculated.
You can choose to calculate the pro-rated leave based on how many days or months remain in the current leave year.
If you select Months from the drop-down menu then the pro rata leave entitlement will be calculated according to this equation:
If you select Days from the drop-down menu then the pro rata leave entitlement will be calculated according to this equation:
You can also choose whether the calculated leave entitlement is rounded and the direction of the rounding. Select from:
- Rounding up
- Rounding down
- No rounding
If you choose to round up or down you will also have to select whether you want to:
- Round to half
- Round to whole
- Round to decimal place (if you select the option of decimal place you will be given the option to select the number of decimal places from a drop-down menu)
Let's look at some examples and work through how the pro-rata leave entitlement is configured and calculated.
Example 1: Fixed entitlement pro-rata release
- Helga starts working for an organisation on 4th March 2024.
- This organisation has a leave policy configured that entitles team members to 16 hours of community service leave every year from 1st January 2024 until 31st December 2024.
- Helga will be at the organisation for 10 months of this 12 month leave period (March is included even though she did not start by 1st March).
Let's look at how Deputy calculates the leave entitlement in this scenario:
1. We can see that the community service leave policy is set up to release 16 hours on the 1st of January and then reset the balance every 1st of January.
2. We can also see that Helga has a Hire date of 04/3/24 and has the Community service leave policy assigned in their profile.
3. When we click on the Leave tab and then select View details for Community Service Leave in Helga's profile we can see that 13.5 hours of leave was added to the leave balance.
5. Using the calculation above Deputy has calculated the leave entitlement as (yearly leave entitlement = 16 hours) multiplied by (months in employment in the leave year = 10 months) divided by (the months in the year = 12 months) also expressed as:
16 hours x 10/12 months = 13.333333 hours.
Notes:
- Even if the employee joins mid-way through the month, that month is counted as a full working month no matter what date in March they joined. Even if they join on the last day of the month then that month will still be counted as a full working month for the purposes of calculating pro-rate leave.
- The leave entitlement example has been configured to round up to the next half hour, in this case, to credit Helga's leave balance with 13.5 hours of Community Service Leave.
- On 1st January 2025, the leave balance will be reset to 0 hours and the full 16 hour leave entitlement will be credited to Helga's leave balance for the leave period of 1st January 2025 to 31 December 2025.
- The leave balance history shown above lists "Deputy" as adding the leave balance for this leave type as this action was automatically triggered by adding the employee part way through the leave year as per the pro-rata configuration of the leave type.
Example 2: Agreed hours pro-rata release
Marvin starts working full time for an organisation on 4th March 2024. His contract states that his leave year starts on 1 April and ends on 31 March and his leave is accrued based on agreed hours with a full-time equivalent employee eligible for 28 days over the leave year.
Let's look at how Deputy calculates the leave entitlement in this scenario:
1. Ensure that the leave policy is set up to accrue leave based on agreed hours with the leave being released every year on 1st April.
2. New starter Marvin's hire date is entered as 4th March 2024 in his profile.
3. Marvin's regular hours are set in his profile and he is assigned the configured leave entitlement.
4. When we click on the Leave tab and then select View details for "UK leave April 1 start cycle" leave policy in Marvin's profile we can see that 3 days of leave was added to the leave balance.
5. Using the calculation above Deputy has calculated the leave entitlement as (yearly leave entitlement = 28 days) multiplied by (days in employment in the leave year = 27) divided by (the days in the year = 366 days since 2024 was a leap year) which can also be expressed as :
28 days leave x 27/366 days = 2.06557 days
Notes:
- This leave entitlement example has been configured to round up to the next whole day so in this case, the pro-rated amount that will be credited to Marvin's leave balance is 3 days of leave.
- On 1st April 2024, the full 28 hour leave entitlement will be credited to Marvin's leave balance for the leave period of 1st April 2024 to 31 March 2025.
- The leave balance history shown above lists "Deputy" as adding the leave balance for this leave type as this action was automatically triggered by adding the employee part way through the leave year as per the pro-rata configuration of the leave type.
Troubleshooting
If pro-rata leave entitlements are working as you expect please confirm the following details:
- check that the leave policy you are expecting to release pro-rata leave entitlements for is configured as one of these two options.
- check that the date that you have set for the leave year to start is correct, especially the year. As you can see in the example below, when you click on the date you need to select the correct year.
- check that the employee hire date you have entered in their profile falls within the leave year of the policy as shown above.
- check that the employee has been assigned the relevant leave policy in their profile.
Note: that the automatic pro-rata leave calculation is only performed once by Deputy, at the point when you first add the new starter employee and fulfill the conditions. If you need to amend the leave entitlement after this point, then the manager will need to amend the leave balance themselves.