Negative leave amounts on termination can be confusing. This article will help you understand negative leave, check the amount shown is correct, and help prevent future issues.
Negative leave amounts on termination can be confusing, and recovering overpaid leave can be problematic. This article will help you understand negative leave, check the amount shown is correct, and help prevent future issues.
About negative leave
When you run a termination pay, MYOB Acumatica calculates the amount of leave the employee is entitled to according to the Holidays Act. This is (typically) 8% of the employee's year-to-date gross earnings (called "holiday pay"), plus any unused annual leave left over from previous years.
Many businesses allow employees to take annual leave in advance of their anniversary date. In this case, the negative value of leave taken is subtracted from the holiday pay amount.
If the negative value of annual leave taken in advance exceeds the holiday pay amount, you are left with a negative leave value.
For more information, see Employment New Zealand: Leave and holiday payments in final pay.
Understanding negative leave in the termination wizard
The Accrual Payment section of the termination wizard shows this calculation. The Accrual payment
- The 8.0000% of Gross earnings figure shows the calculated holiday pay.
- The holiday pay figure is based off the AL YTD gross earnings and the AL Current Pay gross earnings — the gross earnings liable for holiday pay since the employee's last anniversary in prior pays as well as the current pay.
- Less total paid in advance is the dollar value of annual leave paid in advance. it's normal for this to be a negative value.
- The Accrual payment is the dollar value of leave the employee is going to get in their final pay. If this figure is negative you need to check your figures and decide what to do.
Checking a negative Accrual payment figure is correct
While a negative Accrual payment figure could be correct, you should still check the AL YTD gross earnings calculation to make sure there hasn't been a mistake. Employee anniversary dates can change due to changing work patterns, and if this is not handled correctly then the figure may be incorrectly understated.
To check the figure:
- Click the hyperlink to show a breakdown of the pays from which the gross earnings are calculated.
- Check these pays against your employee records to make sure that the correct pays are being used, and that the employee's anniversary date is correct.
If there are problems with the annual leave date, contact your MYOB Acumatica support person for help.
If the negative leave figure is correct you may need to come to an arrangement with the employee about how to deal with the situation. Consider seeking specialist advice.