Leave loading
Leave loading is an extra payment given to certain employees when they take paid leave, usually for their annual leave.
However, not all employees are eligible for leave loading. The determination of whether it is payable or not depends on the employee's Award, Enterprise Agreement, or employment contract.
There are 3 key areas in the platform where leave loading will be configured or applied:
- Award Settings - Leave loading can be set as a default value for all employees working under a particular Award.
- Entitlement Configuration - Leave loading is added as a variable to your entitlements when setting them up.
- Employee Profile - Leave loading can be overridden directly on an employee's profile.
In this article, we will cover:
- Adding leave loading to an Award & via leave entitlement settings
- Overriding in the employee profile & in bulk
- How leave loading displays on payslips
- Steps to troubleshooting leave loading
Looking for information on how to add new or edit existing leave entitlements? Then see our Leave Entitlements help guide here.
In the scenario that all employees in an Award are to receive leave loading, you can add leave loading to your entire Award.
- This will affect everyone paid under this Award unless overridden on the profile.
- Treat this value as the default leave loading for your Award. This value should cater to the majority of your employees paid under it.
- Regardless of the default or override value, for leave loading to be paid, it must be applied as a variable in the entitlement configuration. Please refer to the below section for more information.
To add leave loading to your Award:
- From the main menu, navigate to Awards & Agreements.
- Under the Award you want to edit, select Settings.
- Within the Pay section, you will find the Leave Loading field. Enter the percentage Leave Loading you'd like to apply as a default.
- Save.
You can read more about this setting and best practices for adjusting settings that affect an entire Award here.
For leave loading to be paid, it must be applied as a variable in the entitlement configuration. This is true regardless of what is set as the Award default or override value on the employee profile.
To add leave loading to an entitlement:
- From the main menu, navigate to Payroll Settings > Leave Rules.
- Edit the relevant entitlement.
- Add leave loading as a variable to any of the following fields:
- Variables on Cashing - Applicable when an employee is paid for their entitlement without taking the leave.
- Variables on Termination - Applicable when an employee is paid out for their entitlement upon termination.
- Variables on Leave Application - Applicable when an employee redeems their leave entitlement.
For example, if leave loading is added as a variable in Leave Application only, then employees will be paid leave loading only when redeeming this leave type. When cashing out or terminating an employee, no leave loading would be applied. - Save.
You can read more about creating new or editing existing leave entitlements here.
There may be instances where some employees' entitlement to leave loading will differ from others. In these cases, the leave loading should be overridden on the profile.
- This process is only necessary for employees who are entitled to something different to what you have set in the award settings.
- Regardless of the default or override value, for leave loading to be paid, it must be applied as a variable in the entitlement configuration. Please refer to the above section for more information.
To override leave loading for an individual employee:
- Navigate to the Employee's Profile > Employee Card > Employment Type and locate the relevant entitlement.
- Click Edit, enable 'Override leave loading' and add the desired percentage.
Tip: The employees you override the leave loading for should be the smaller group of employees.
For example, if only a few employees are entitled to it, those employees should have the loading percentage applied to their profile with the default (in award settings) set to 0%. However, if only a few employees are not entitled to leave loading, they should have the leave loading overridden to 0% on the profile.
Leave loading can be overridden in bulk via an import. This can only be done for permanent employees. If casual employees require leave loading to be overridden, this must be done individually.
To import leave loading overrides for your permanent staff:
- Navigate to the main menu > Import/ Export > CSV Import >then select Employee Entitlements from the drop-down menu.
- Click Export Current Entitlements and open the CSV file.
- Find the applicable employees and update the required fields.
- Use default - 'Yes' denotes that the default leave loading rate is being used. Set to 'No' if you intend to override the leave loading.
- Leave loading - The overridden leave loading rate if 'Use Default' is 'no'. Enter the value as a number (e.g. 17.5), there is no need to add a % symbol.
- Save your CSV file.
- Back in foundU, select Choose file and select your updated CSV.
- Select Import CSV.
Entitlements are displayed in a broken-down state on the payslip. Under each entitlement taken you can see:
- The base rate of the entitlement.
- The leave loading applied to the entitlement (if applicable).
- Other loading rates applied to the entitlement (if applicable).
If leave loading isn't being applied for an employee when it should be, use the following process to identify the issue.
-
Ensure that leave loading has been included in the entitlement configuration. If leave loading is not applied here, it will not be paid.
Refer to the section 'Adding Leave Loading in Leave Entitlement Setup' above for more information.
- If leave loading applies to all employees in an Award, ensure that you have a value for leave loading in the award settings.
Refer to the 'Adding leave loading to an Award' section above for more information.
- If leave loading only applies to specific employees or if the issue is specific to a single employee, ensure that leave loading isn't being overridden on the employee profile. With an override of 0%, regardless of the award settings or the entitlement configuration, nothing will be paid.
Refer to the 'Override leave loading on an Employee's profile' section above for more information.
In the below example, the entitlement on the left has no override and will use the award settings & leave entitlement configuration. The entitlement on the right has an override of 0% and will not be paid regardless of the award settings & leave entitlement configuration.