Reference Date
The vacation entitlement reference dates, according to the law, are from May 1st to April 30th in the province of Quebec. Those dates can be modified from the “Payroll Information” tab of the “Edit Company Information” screen.
The vacation amount is accrued on each payroll for the reference year, according to the percentage to which each employee is entitled, which is specified under the “Payroll” tab of the “Editing employee” screen.
Amount
The vacation amount to which an employee is entitled in July 2017 is the one accrued on April 30th, 2017 (if the reference date is April 30th), as shown in the vacation report.
In addition, the vacation report also indicates the amount accrued to date (Accumulated Vacation Amount), and it is this amount which must be paid as separation payment when an employee leaves employment.
The payroll category associated with the payroll item used in the production payroll determine if the amount of income is subject to vacations and so will be considered to fund the amount. For example, paid vacations, as wages are entitled to a vacation for the next year while a severance payment of termination is not subject to vacations.
On each payroll, you have an accurate picture of the amounts accrued and deducted, as well as on paystubs.
Duration of Vacations
Vacation duration isn’t necessary equivalent to the amount. Since the amount contains every amount paid to the employee prorated earnings (bonus, overtime, etc.), it can be higher than the amount of a regular pay. Therefore, Nubis helps you and offers you the accrued amount (at the end of the previous reference year) when you select a “vacation” payroll item when doing the payroll. If you pay more, Nubis warns you but doesn’t stop you.
Similarly, severance payments will automatically be added to the block 17A of the Record of Employment. It is therefore essential to use the right payroll item corresponding to the situation at the time of producing the payroll.
Vacation Report
To find out the accumulated vacation amount for each employee, Nubis calculates the exact amount each employee is entitled depending on the wages earned in the reference year. You can easily review them by printing the vacation report.
When you create a pay, and use the payroll item “Income – Vacation Pay”, Nubis fills out the correct amount based on th available vacation for the current vacation period (you are able to edit the amount before processing the payroll).
Vacation Adjustment
Vacation accrued before your Nubis migration can be added at any time. To do this, you must go to the “Employees” screen and click the “Cumulative Adjustment” link under the name of the employee. Then you go to the “Accrued Vacations” tab and update the amount. Nubis will create an adjustment transaction to update the amount.
Accounting Impact
Here are some accounting information regarding the payment of vacations.
Accrued vacation are accumulated in a liability account. When paid, the liability account is debited. However, there is a way to make the vacation expense be charged to a specific account based on the employee. For example, the GL account used for a developer may not be the same than a consultant.
Nubis makes an additional accounting entry when the expense account associated with the payroll item that pays vacation does not correspond to the vacation generic account. This accounting entry credits the generic account and debits the designated account to assign the expense to the correct account.
You can see the accounting entry of each payroll by clicking on “Download GL Report” of the “Actions” menu (available in step 4 of 4 of the payroll process).