Vacation Pay and Bonuses for Salaried Employees with Change in Basic Pay and Working Time
For vacation accrued from April 01, 2013, the system calculates vacation payment (vacation pay and vacation bonuses) for salaried employees (employee subgroup FP) based on whether an employee's monthly remuneration and planned working time have changed within or after the accrual period.
The system checks changes to remuneration on the Basic Pay
(0008) infotype; whilst it checks changes to working time on the Planned Working Time
(0007) infotype. If such a change occurred, the date of the change is also stored on the Date Specifications
(0041) infotype using date type FV.
For vacation accrued before April 1, 2013, vacation pay and bonuses are calculated using vacation calculation formula 1, described below.
Determining vacation payments
During the payroll run, the payroll driver calculates vacation base by carrying out the FIVBA function. Depending on whether both an employee's remuneration and planned working time have changed within or after the vacation accrual year, the function forms the vacation base from the cumulated vacation wage types /102 or /860 which contain the employee's monthly remuneration as described in the following table. The system chooses between /102 and /860 using processing class 62 according to whether factoring is necessary. For more information, see wage type documentation for /102 and /860 in the system.
To calculate vacation pay and vacation bonuses, the function also determines the vacation calculation formula to be used and specifies it in V0 entries in the /VFV wage type as described in the table below.
Manual Correction of Vacation Base in Case of Retroactive Changes
If you change an employee's remuneration and planned working time within the accrual period, and you also change the employee's remuneration after the vacation accrual period for a month that is within the vacation accrual period, you must manually adjust the vacation base so that the system can take into account the additional change in remuneration when it calculates vacation pay.
For this reason, you must calculate the difference between the vacation base before and after the change in remuneration. You must also enter this difference in wage type /VFR
on the Additional Payments
(0015) infotype. The system will add the amount to the vacation base for the month for which you entered the wage type when you run payroll the next time.
Calculating the vacation payments
After it has determined the vacation calculation formula, the payroll driver calculates vacation pay based on the same principle it has determined the vacation base, that is, based on whether both the employee's remuneration and planned working time have changed within the vacation accrual year:
Change in remuneration and planned working time | Vacation base | V0 entries in /VFV | Name of vacation calculation formula | Vacation calculation formula |
|---|---|---|---|---|
No change | /VFV = /102 | V0TYP = A V0ZNR = 1 | Formula 1 | Vacation pay = (number of vacation days / work days in month when employee takes vacation) * vacation base Vacation bonus 1 = (((vacation base) / 25) * number of vacation days taken) * 0.5 * 0.4 Vacation bonus 2 = (((vacation base) / 25) * number of vacation days taken) * 0.5 * 0.6 |
Within accrual period | /VFV = Cumulated /860 for accrual year * percentage rate (constant T511K-VPCT1 or T511K-VPCT2) The system determines which constant it should use based on the employee's seniority as follows: If the employee has less than one year seniority on the last day of the accrual period, the system uses VPCT1 as the percentage constant; otherwise it uses VPCT2. For more information, see the documentation of these constants in Customizing.
The default values of VPCT1 and VPCT2 constants are 9 and 11.5, which stand for percentage rates 9% and 11.5% respectively. In some collective agreements higher percentage rates might be stipulated. You can change the values of the constants in Customizing for End of the note. | V0TYP = A V0ZNR = 2 | Formula 2 | Vacation pay = ((vacation base* percentage constant) / accrued vacation quota) * number of vacation days taken Vacation bonus 1 = (((vacation base* percentage constant) / accrued vacation quota) * number of vacation day taken) * 0.5 * 0.4 Vacation bonus 2 = (((vacation base) / accrued vacation quota) * number of vacation day taken) * 0.5 * 0.6 |
After accrual period | /VFV = /102 Remuneration valid on the day before the change in remuneration and working time | V0TYP = A V0ZNR = 3 | Formula 3 | Vacation pay = (vacation base/ 25 ) * vacation days taken Vacation bonus 1 = ((Vacation base / 25 ) * vacation days taken) *0.5 * 0.4 Vacation bonus 2 = ((Vacation base / 25 ) * vacation days taken) *0.5 * 0.6 |
Note
Example
Change in remuneration and planned working time within accrual period
Example
Oliver Nieminen earns EUR 10,000. He decided to work only 50% from August 1, 2014 therefore his remuneration changed to EUR 5,000. He took vacation from February 9 to 22, 2015, covering 10 workdays. For the vacation, he used quota that he had earned in the vacation accrual year lasting from April 1, 2014 to March 31, 2015. On the last day of the accrual year he worked for your company for over one year.
The system calculated the vacation base as follows: (4 * EUR 10,000 + 8 * EUR 5,000) * 11.5% = 9200
Vacation pay = (EUR 9200 / 20) * 10 = EUR 4600
Vacation bonus 1 = (EUR 9200 / 20) * 10) * 0.5 * 0.4 = EUR 920
Vacation bonus 2 = ((EUR 9200 / 20) * 10) * 0.5 * 0.6 = EUR 1380
Manual Correction of Vacation Base in Case of Retroactive Changes
Example
Venla Virtanen works full time and her salary is EUR 10,000. However, she decides to work only 50% from March 1, 2015. Therefore, you change Venla's planned working time to 50% and her salary to EUR 5,000 effective of the said date. You also enter the date of the change (March 1, 2015) in the Date Specifications
(0041) infotype with date type FV (Vac: BP & TimeChange).
Venla goes on vacation from February 3, 2015 to February 15, 2015. Because both Venla's remuneration and planned working time were changed during the vacation accrual period, the system does a retroactive calculation run to recalculate the vacation pay using Formula 2.
In April, you raise Venla's salary from EUR 5000 to EUR 6000 with retroactive effect from March 1. Because the accrual period is over, the system does a retroactive calculation in April for February and March.
When recalculating the vacation pay for February, the system reads the vacation base valid in February, which is EUR 10,000. In this step, the system does not yet have information about the salary raise in March.
When recalculating the vacation pay for March, the system compares the changed vacation base (EUR 6000) with the old base (EUR 5000) and prompts you to enter the difference into wage type /VFR. After you enter the amount in /VFR, you must run payroll for April again. This will include retroactive calculation of February and March, now with the difference between the old and the change base that you entered in /VFR.
Change in remuneration and planned working time after accrual period
Elsa Junttila works full time and her salary is EUR 15,000. However, she decides to work only 50% from April 15, 2015, so her salary is also changed to 7,500. She takes a 5-day vacation from May 4 to May 8 from the quota that she accrued in the vacation accrual year lasting from April 1, 2014 to March 31, 2015. Because her remuneration and planned working time changed after the accrual period, the system reads her remuneration that was valid on the day that preceded the change (April 14, 2015), and uses it to calculate vacation pay and quota according to Formula 3 as follows:
Vacation pay = ( EUR 15,000 / 25 ) * 5 = 3000
Vacation bonus 1 = ( EUR 15,000 / 25 ) * 5 *0.5 * 0.4 = EUR 600
Vacation bonus 2 = ( EUR 15,000 / 25 ) * 5 *0.5 * 0.6 = EUR 900