Payroll Module

Accruals Overview

Accruals are used to accumulate time off or sick time on employee records. Before you can accrue time on an employee record, you must set up four items: Setup window, accrual types, accrual codes and the pay codes.

 

Setup window

 

There is an Accruals tab on the Setup window (PR> Utilities> Setup) that affects how accruals function in the Payroll module. The toggles on the Setup window can affect how accruals are expensed, how they roll over and how they cap.

 

Click here for information on the Accruals tab of the Setup window.

 

Accrual Types

 

Accrual types determine how accruals will appear on checks and reports. When you attach an accrual to an employee record, you also attach an accrual type. The accrual type determines how the accrual will appear on the check. This allows you to set up multiple accruals for the same accrual type (for example, you can create more than one accrual for sick time). Accrual types are created and maintained using the Accrual Type Maintenance window (PR> Maintenance> Accrual Type).

 

Click here for information on accrual types.

 

Accrual Codes

 

Accrual codes determine how the hours will actually accrue on the employee record. For example, if an employee should accrue four hours of sick time every pay period, you set up that calculation on the accrual code. Accrual codes are created and maintained using the Accrual Code Maintenance window (PR> Maintenance> Accrual).

 

Click here for information on accrual code maintenance.

 

Pay Code

 

Pay codes are used to record the use of the accrued hours after the employee has accumulated them. For example, if an employee uses 40 hours of accrued time off, the time card line item should be attached to a pay code set up to reduce the accrued time off hours. Pay codes are created and maintained using the Pay Code Maintenance window (PR> Maintenance> Pay Code).

 

Click here for information on pay code maintenance.

 

Attach an accrual to an employee record

 

After all of these items have been set up, you can attach an accrual type and accrual to the employee record using the Employee Maintenance window (PR> Maintenance> Employee> Accruals tab). When attaching the accrual code to the employee record, you can set a period or annual cap. If there is a cap set up on the accrual record and the employee record, the cap source selected on the Accruals tab of the Employee Maintenance window will be applied.

 

When time cards are generated, the employee will accrual hours based on the rate set up on the accrual code.

 

Click here if an accrual is not being calculated on an employee record.

 

When a paycheck is printed (PR> Computer Checks> Checks), the hours accrued on the accrual code will display by accrual type. This only applies if the accrual type is set up to display on the check (PR> Maintenance> Accrual Type> Show on check toggle).

 

When an employee would like to use the accrued hours, generate a time card line item using the pay code attached to the accrual code. This will expense the accrual and reduce the accrued hours.

 

Example - Create an accrual to track sick time

 

1     Create an accrual type titled “SICK” using the Accrual Type Maintenance window (PR> Maintenance> Accrual Type). The title SICK will display on reports and the payroll check.

 

2     Create an accrual to set up how sick time will accrue titled S using the Accrual Maintenance window (PR> Maintenance> Accrual).

 

3     Create a pay code titled S using the Pay Code Maintenance window (PR> Maintenance> Pay Code). Select Accrual in the Pay Type drop-down menu and attach the S accrual code to the pay code using the Accrual field.

 

4     Attach the accrual type and accrual to an employee record using the Employee Maintenance window (PR> Maintenance> Employee> Accruals tab). Make sure the accrual code is set up as active on the employee record.

 

5     Check the Calculate Accruals toggle on the Generate window when creating the payroll checks in the Computer Checks process (PR> Computer Checks> Generate).

 

6     When generating a timecard (PR> Computer Checks> Time Cards), the employee will accrue hours.

 

Cap an accrual

 

An accrual can be capped by pay period or annually.  Period caps are applied to each paycheck and limit the hours that can be accrued during a pay period and also limit the balance of the accrual during any pay period. Annual caps are applied annually (either on a specific date or on an employee's anniversary date).

 

You can enter a period or annual cap on an accrual code using the Accrual Maintenance window (PR> Maintenance> Accrual) or the Employee Maintenance window (PR> Maintenance> Employee> Accruals tab) when the accrual is attached to the employee record. If there is a cap set up on the accrual record and the employee record, the cap source selected on the Accruals tab of the Employee Maintenance window will be applied. This allows you to customize how the accruals will calculate on each employee.

 

You can do four things with the accrued amounts that are over the cap: erase them, roll them over onto another accrual code, roll them over and then erase them, or pay them out using a pay code. These options are set up on the Accrual Maintenance window (PR> Maintenance> Accrual), and are not available at the employee record level. Click here for information on accrual code maintenance.

• If you roll over the capped amount onto another accrual, the roll over accrual should be attached to the employee record.
• The roll over and then erase option is most often used when accrual rates with more than two decimal places are required. These accrual rates can cause the total annually accrued hours to exceed the annual cap by a small fraction of an hour. The system will roll over the accrued amount up to the annual cap and then erase the remaining fraction to minimize accounting complexity.
• If you roll over the capped amount to a pay code, the accruals will be paid out using a pay code. When a Computer Checks batch is generated for an employee record, the system will create a timecard line item to pay out the amount over the cap. This generated timecard line item will display on the System Timecards tab of the Timecards Maintenance window (PR> Computer Checks> Timecards). Click here for information on the System Timecards tab of the Timecard Maintenance window. The accrual hours will be paid out using the hourly wage of the employee record. For example, if 15 hours will be rolled over and paid out using a pay code and the employee has an hourly rate of $20.00 (PR> Maintenance> Employee> Financial tab> Select the effective revision> Details section> Hourly Rate field), the timecard line item would be 15 hours at $20.00 per hour. If there is a multiplier on the pay code used to pay out the rolled over hours, the hourly rate on the employee record will be multiplied by the pay code multiplier (PR> Maintenance> Pay Code> Rate Multiplier field).

 

Base an accrual on another accrual

 

Bonus accruals are accrual codes that are credited when an employee limits their usage of another accrual code. For example, an organization could reward an employee with 8.0 hours of time off if that employee took no more than 16.0 hours of sick time in a year.

 

Click here for information on Bonus Accruals.

 

Reports

 

There are four Payroll module reports that display accrual information:

• The Accrual Register Report displays the accrual balances of employee records filtered by payroll check date, department, reporting group or payroll check batch number. Click here for information on the Accrual Register Report.
• The YTD Accrual Register displays the accrual balances of employee records filtered by payroll check batch number. Click here for information on the YTD Accrual Register Report.
• The Compensated Absences Report displays the accruals expensed during a fiscal year. The fiscal year of a payroll check is set by the journal entry date set during the Calculate Payroll step (PR> Computer Checks> Calculate Payroll). Click here for information on the Compensated Absences Report.
• The Employee Master Report displays employee record information and can include the accrual balances on the employee. Click here for information on the Employee Master Report.