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Entitlement Configuration

Employees may be entitled to take personal days during their employment. This guide will cover how to keep track the number of personal days an employee is entitled to and ensure that they are paid appropriately when they take a personal day.

This guide will setup the Personal Days in the following way:
  • limited to 5 personal days per year,

  • not carried-forward into the next year if they are not used,

  • generated automatically each year,

  • paid at the employee’s normal daily-rate.

Overview

In order to track Personal Days correctly at minimum two codes must be used:

  • A Benefit Code that

    • records the personal day entitlement accrued for each employee.

    • tracks how many personal days have been taken, and how many are remaining.

  • An Earning Code that

    • is used for recording the personal days taken by employees.

    • controls the rate-of-pay for the personal day taken.

Finally, the codes will be added to an example employee and the instructions for using the codes correctly will be covered.

Add Benefit Code for Personal Day Entitlement

Using a Benefit Code the number of personal days available will be stored as an entitlement. When an employee is paid for a Personal Data the entitlement will be reduced automatically.

  1. Open Canadian Payroll > Employer Payroll Tables > Benefit/Deduction Codes.

  2. Add a new Benefit Code by pressing Insert.

  3. Enter the Code and Full Name for the Benefit Code.

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    Figure 1. Example Code and Full Name

Deduction Data Setup

  1. Open the Deduction Data tab of the Benefit/Deduction Codes settings.

  2. Enter the Short Name to use for the Benefit Code.

  3. From the Type drop-down select Accrued Sick Leave.

  4. Enable Leave Entitlement.

Short Name

May appear on the employee payroll statement, and can be up to 6 characters long.

Leave Entitlement

Enables additional options for the Benefit Code to be used as an entitlement

  1. Change the entitlement options to

    • Accumulate in Days,

    • Display in Units,

    • Validate taken Units.

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Formula Setup

A formula will be used to ensure that the entitlement is given to all employees correctly.

  1. Open the Formulas tab of the Benefit Code settings.

  2. Enter @IF( L6 == 0, 5 , 0 ) into the Leave Leave Units L0= field.

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    Figure 2. The Leave Units L0 field accumulates leave according to the Gen. Frequency
    Leave Units L0= @IF( L6 == 0, 5 , 0 ) (1)
    1Sets the leave units of the entitlement to 5 days.
    Notes:

    When an employee takes a personal day it is recorded separately from the accrued entitlement (not deducted from the accrued entitlement) so the number of accrued days will remain at five after the entitlement is taken.

    During the year-end process
    1. Entitlement accrued amounts are reset from Canadian Payroll > Year End > Initialize Entitlements.

    2. The formula will apply 5 days of personal day entitlement during the next pay-period automatically (because the accrued amount is now zero).

Add Earning Code for Personal Day Taken

An Earning Code will be created to
  • record when a personal day is taken,

  • pay the employee their normal daily rate for the personal day,

  • deduct the taken personal day from their entitlement amount.

    1. Open Canadian Payroll > Employer Payroll Tables > Earnings Codes.

    2. Add a new Earning Code by pressing Insert to open the Earning Code setup form.

Basic Setup

  1. Enter the Code and Full Name for the Earning Code.

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    Code

    The code must be a 3-digit number between 001—499.

    Full Name

    The full name of the Benefit Code may be displayed on employee statements or other reports.

Earning Data Setup

  1. Open the Earning Data tab of the Earning Code settings.

  2. Enter the Short Name to use for the Earning Code.

    Tip: % of Basic

    % of Basic what percent of the employee basic rate to use for earnings with this Earning Code (it should default to 100% which will pay the employee their normal rate).

  3. From the Accumulate Work Unit In drop-down select Days.

  4. From the Earning Type drop-down select TakeLeave.

    Note:
     This enables the Leave Entit. field.
  5. From the Leave Entit. drop-down select the personal day entitlement Benefit Code.

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T-Slip Setup

Because the employee is paid for the personal day, the earnings should be included with the employee’s income on their t-slips. Earning Codes can be setup from the T-Slips tab to include the earnings on the t-slips automatically.

  1. Open the T-Slips tab from the Earning Code settings.

  2. From the T4 Box drop-down select code 14 - Income. (This will add the earnings for this earnings code to the income amount reported on the t4 form.)

  3. From the RL1 Box drop-down select code A - Employment income before srce ded. (This will add the earnings for this earnings code to the income amount reported on the Revenu Quebec RL-1 form.)

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Figure 1: Example T-Slip setup for the personal day entitlement Earning Code.

Review and Save

  1. Review the settings in the Accumulators tab to ensure that they are correct.

  2. Save the personal day entitlement Earning Code by pressing OK.

Add Personal Day Entitlement to an Employee

  1. Open Canadian Payroll > Employee Profile > Employee Profile.

  2. From the Employee drop-down select the employee to add the entitlement to.

  3. From the Employee Profile menu on the left open the Deduction/Benefits > Leave Entitlements tab.

  4. Add the entitlement Benefit Code by pressing Insert.

  5. Select the personal day entitlement code from the Deduction Code drop-down.

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    Tip:
    Code Type, the Effective and Expiry dates, and the Active option can be left as default.
  6. Add the entitlement code to the Employee Profile by pressing OK.

Example: Entitlement Added During Payroll

When the next payroll is processed the employee will automatically receive 5 days of personal day entitlement.

(Because the formula used on the entitlement code checks if the employee has zero entitlement days accrued—which they do—and automatically generates 5 days for the entitlement amount that pay period.)

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J
Jack is the author of this solution article.

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