Payment of Vacation Days Funded by Fringe Benefits

Objective

Payroll reconciliation balances hours entered in projects through payroll by assigning projects with bonuses paid through payroll to ensure both modules always balance. This method affects the payment of vacation days.

By funding vacation days every week, the system assigns vacation expenses to projects. You must enter a Vacation Pay bonus to pay vacation through the entry of hours assigned to projects.

This document contains information on the steps involved in paying vacation days that were funded with fringe benefits using maestro*.

Summary

Check whether fringe benefits are used and whether vacation days are funded
- Confirm the hour transfer method
- Confirm the funding of a percentage of vacation days
Configurations required before vacation can be paid
Payment of vacation from the Enter Hours option
Impact on Hours Management
Impact on Employee Management

Steps

Check whether fringe benefits are used and whether vacation days are funded

Confirm the hour transfer method

maestro* > Time Management > Maintenance > Time Management > Configuration

To confirm the transfer of hours, access Configuration in Time Management.

The Hours Transfer field must be set to Balanced when you run payroll reconciliation.

If the transfer of hours is set to Normal, ignore this procedure and continue using your current vacation days payment method.

Confirm the funding of a percentage of vacation days

To fund an amount of vacation pay every week, a percentage must be entered in the Vacation Rate field in the employee record or employment category.

Configurations required before vacation can be paid

Define the vacation accounts to be paid

maestro* > Time Management > Maintenance > Payroll > Configuration

To post the vacation pay paid, you must complete the Vacation Pay Account and Vacation Pay Paid (Debit) fields in Configuration of the payroll, Accounts tab.

The following fields must be completed:

Fields	Description
Vacation Pay Account	General ledger account to which vacation pay allocations are posted.
Debit	Mandatory for those who use payroll reconciliation in projects to pay for vacation. This is the same account as the one for vacation bonuses. We suggest using a vacation payable account.

Define the Vacation bonus

maestro* > Time Management > Maintenance > Payroll > Define Earnings/Deduction Codes

The following fields must be completed:

Fields	Description
Code	Enter the code for the bonus.
Unit	Unit for the bonus. NOTE: For example, $ for dollars.
Description	Enter the description for the Vacation bonus.
Type	You must select the Vacation bonus (taxable bonus) or Net Vacation bonus (tax exempt bonus).
Account	Be careful! This account must be identical to the vacation pay account (debit) in Configuration - Payroll.
Amount ($) = Quantity	Enter the value of 1 in the second field.

This bonus will be used when hours are entered in the project. For additional information on the other fields, please refer to Define Earnings/Deduction Codes help topic.

Associate the vacation bonus with an account by department

maestro* > Time Management > Maintenance >

The Accounts by Department option is used to define specific accounts for the various departments. It is helpful for companies that use balanced fringe benefit management. This option uses the salary account for the labour activity entered for the expense project to assign hours to projects. The Vacation bonus must have been created earlier to associate the bonus with the labour activity account (reference).

Provide the following information at a minimum:

Fields	Description
Reference Account	Identification of the general ledger account. Must be the account entered in the labour activity for projects. For example, Vacation Pay Paid (31370). NOTE: This account is used as a reference for the distribution of salaries and fringe benefits. When the system encounters this account during the transfer of hours, it uses it as a reference to distribute salaries and fringe benefits to the various accounts entered. A record must be completed for each of the various salary expense types used in the projects. Attention! This field is mandatory and must be a vacation pay account.
Salary Account	Enter the vacation pay account.
Fringe Benefits Account	Enter the fringe benefits expense account.

Fields

Description

Reference Account

Identification of the general ledger account. Must be the account entered in the labour activity for projects. For example, Vacation Pay Paid (31370).

NOTE: This account is used as a reference for the distribution of salaries and fringe benefits. When the system encounters this account during the transfer of hours, it uses it as a reference to distribute salaries and fringe benefits to the various accounts entered. A record must be completed for each of the various salary expense types used in the projects.

Attention! This field is mandatory and must be a vacation pay account.

Salary Account

Enter the vacation pay account.

Fringe Benefits Account

Enter the fringe benefits expense account.

Payment of vacation from the Enter Hours option

maestro* > Time Management > Project Time > Processing > Enter Hours

Given that vacation in projects has been funded, you must assign a project that will decrease the amount in the vacation pay account. To do this, you must select an activity linked to the account by department (reference) mentioned above, select the VAC – Vacation type bonus created and enter the hours for the amount of vacation to be paid.

You can then continue processing the payroll normally.

Impact on Hours Management

maestro* > Time Management > Payroll > Payroll > Hours Management

Impact on Employee Management

Once vacation has been paid by entering hours, the system displays the payment of vacation in the Vacation Paid field of the Vacation Pay tab in Employee Management.