Accrual Movements are the difference between the leave accrual liabilities of pay runs which cannot be attributed to leave accruals or payments. Generally, the most common reason for an accrual movement is a pay increase. Other scenarios which would generate an accrual movement are:
The payment of the annual leave is greater than the liability calculated (i.e. you pay above the accrued hours, or you pay above the pay policy rate for leave loading). This is only when the leave loading is included in the Annual Leave pay item and not a separate pay item.
Accruing on different pay rates. This will cause an accrual movement as when the liability is calculated it is based on the pay policy rate.
Terminating an employee but not paying out the respective balances until a future pay run. In these cases, there may be 2 movements (a negative in the earlier pay period and a positive amount in the later pay period).
Previously terminated employees that may not have had the initial accrual balance stored.
Australia:
When the accrual type has a Probability of Entitlement or Discount Factor configured.
New Zealand:
The employee’s Holiday Pay rate has changed in the new pay period.
Having Accrual Movements enabled allows your general ledger to be dynamically adjusted each pay run to reflect your employee liabilities more accurately.
Setup
Create an Accrual Movement pay item in Admin, Structure, Pay Items, Accrual Pay Items, Add New Pay Item.
2. Add the Accrual Movement pay item to the relevant accrual type in Admin, Configuration, Accrual Types.
Select the Accrual Movement pay item in the Movement Pay Item dropdown.
By default, Movements will be ignored if they are $1.00 or less. This can be changed to a different value.
Click Save.
Processing
Once this feature is enabled, pay run calculations will determine the total cost of employee Annual Leave balances and generate Annual Leave Movements when required.
Formula
Current pay period accrual liability (Hrs x Rate) - Previous pay period accrual liability (Hrs x Rate) = Difference
Difference + Accrual Type linked pay items in current pay period (i.e, leave taken) - Accrual pay items (in current pay period) = Movement
Examples
Current Period Pay Rise:
Current PPE Liability | 105 hrs x $30 = $3,150 |
Previous PPE Liability | Previous PPE Liability 100 hrs x $25 = $2,500 |
Difference in PPE Liability | $650 |
Accrual Type linked pay items in a current pay period (ie leave taken) | 0 hrs x $0 = $0 |
Accrual pay items | 5 x $30 = $150 |
Movement | $650 - $150 = $500 |
Backpay pay rise and leave taken:
Current PPE Liability | 75 hrs x $30 = $2,250 |
Previous PPE Liability | 100 hrs x $25 = $2,500 |
Difference in PPE Liability | $-250 |
Accrual Type linked pay items in current pay | 30 hrs x $30 = $900 |
Accrual pay items | 5.00 x $30 = $150 |
Movement | $-250 + $900 - $200 = $450 |
Normal with leave taken:
Current PPE Liability 75 hrs x $25 = $1,875 | 75 hrs x $25 = $1,875 |
Previous PPE Liability | 100 hrs x $25 = $2,500 |
Difference | $-625 |
Accrual Type linked pay items in current pay | 30 hrs x $25 = $750 |
Accrual pay items | 5 x $25 = $125 |
Movement | $-625 + $750 - $125 = $0 |
Reporting
A history of Accrual Movement calculations is stored in the Accrual Balances report. The ‘Total Adjusted Value’ is where the total cost of the employee’s accrual is displayed. Navigate to Reporting, Accrual Reporting, Accrual Balances.
