Estimating Leave Liability

We've received a few enquiries lately about estimating leave liability and leave balances up to some future date.

Given that the software doesn't know for certain if leave will be consumed before a future date, or even if an employee will still be employed it isn't something that SmoothPay can work out for you - you'll have a much better idea of what will be likely for your staff and business.

However, we do have a simple procedure that you can use to estimate these things.

Here goes...

  1. Take current termination value = (A)
  2. Estimate income from now until target date = (B)
  3. Multiply (B) by 8% to give a rough termination value = (C)
  4. Total liability A + C = (D)
  5. Determine value of any anticipated leave (E)
  6. Estimated liability at target date D - E

To estimate an employee's leave balance (e.g. annual leave):

  1. Take unused leave balance (this is the balance remaining unused from annual accruals) (A)
  2. Add 4 weeks for each anniversary that occurs between now and the target date (B)
  3. Determine any anticipated leave (C)
  4. Estimated balance of leave available A + B - C

To estimate a proportional balance (this is NOT the employee's legal entitlement):

  1. Take unused leave balance (this is the balance remaining unused from annual accruals) (A)
  2. Add 4 weeks for each anniversary that occurs between now and the target date (B)
  3. Determine any anticipated leave (C)
  4. Work out the number of days occurring between the anniversary immediately before before target date and up to the target date (D)
  5. Estimated balance A + B - C + ((4 / 365) * D)

 

Have more questions? Submit a request

0 Comments

Please sign in to leave a comment.
Powered by Zendesk