Easily manage retrospective leave for your employees
Retrospective leave refers to leave applications that are approved after the pay for the period they fall in has been processed.
There are several options for managing retrospective leave and the correct one for you will be determined by the employment type of the employee as well as other factors discussed below.
In this article, we will cover:
- Salaried employees (Salaried basis enabled)
- Non-salaried employees (Approve shift basis enabled permanents and casuals)
For all employees, if the payslip has not yet been processed, approving the leave will push the hours through to payroll without issue.
You can read more about the ins and outs of managing leave here.
Salaried employees
Before managing or applying for retrospective leave, it is important to understand how it works. Please consider the following points before deciding which method is best for you.
- If the payslip is in a draft state, approving a leave application will add those hours to the payslip. You will not need to reprocess the payslip.
- If the payslip has been processed, when approving or submitting a leave application, you will be presented with these 2 options:
- Handle manually - This option will approve the leave application and take no further action. No hours will be deducted from the employee's entitlement balance, and the payslip will not be updated.
- Deduct from employee - This option will approve the leave application. It will also deduct the leave hours from the employee's entitlement balance. The payslip will not be updated.
When managing retrospective leave for your salaried employees, there there are 3 processes available to you. The process you choose will depend on your business considerations and how you would like to handle the leave.
To manage leave applications that come through after you have processed your payroll, you can either:
- Handle manually (after approving a leave application)
- Deduct from employee leave balance (automatically when approving a leave application)
- Add directly to a payslip, through an adjustment (with no leave application)
Hot tip: If you pay your employees monthly, the process for handling retrospective leave will be the same as what is mentioned in this guide.
Read through each tab below to understand the 3 different ways you can manage retrospective leave for your salaried employees.
When approving a retrospective leave application, you can opt to handle it manually. The same is true when you submit a retrospective leave application on behalf of an employee.
When you choose to handle this manually, the following actions will happen:
- The leave application will be approved
- The leave hours will not be deducted from the entitlement balance
- The payslip will not reflect that leave has been taken
- The employee will not be paid for the leave specifically
The manual process to handle the leave application is to:
- Locate and approve the pending leave application. When doing this, ensure you select the option to 'Handle manually'.
- Navigate to Payroll > Pay and locate the employee's Generated payslip.
- From the drop-down next to the payslip number, select Create Adjustment.
- Select + Add > Entitlements to add the leave entitlement used and the amount redeemed.
- Once the payslip has been updated, select Adjust and add any comments you might want to let the employee know, or keep for internal audit records.
- You will need to generate the adjustment payslip to update the employees' leave balance and accruals. Admins and employees will be able to see 2 payslips for the pay period.
SCENARIO
We'll use the following example to look at how to process the retrospective leave.
Kara is a salaried employee and took 3 days off as annual leave. The leave application was not submitted until after payroll had been processed.
How can an Admin User resolve Kara Leave application and ensure her record reflects the leave redeemed?
- Manage the Leave application by selecting 'Handle manually' when approving.
- Adjust Kara's payslip and add 22.8 hours (3 days x 7.6) to redeem annual leave.
- Leave a comment to communicate this change when generating your adjustment.
Before selecting to handle manually, consider the following:
- This method removes the need to adjust the entitlement balance as it is handled automatically through the payslip adjustment.
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The leave application will be linked to the adjustment payslip on the Time Off page.
- If your salaried employee needs to be paid Leave Loading, this process is best suited.
When approving a retrospective leave application, you can opt to have the system deduct from the employee's leave balance. The same is true for when you submit a retrospective leave application on behalf of an employee.
When you choose to deduct the leave balance, the following will be actioned:
- The leave application will be approved
- The leave hours will be deducted from the entitlement balance
- The payslip will not reflect that leave has been taken
- The employee will not be paid for the leave specifically
To deduct from the employee's leave balance:
- Locate and approve the pending leave application. When doing this ensure you select the option to 'Deduct from employee leave balance'.
- Doing this will update the entitlement balance on the employee's profile.
- Review the entitlement balance on the employee profile, to confirm that hours have been deducted correctly.
- This step is not required, but is recommended to double check that the action has been processed correctly.
SCENARIO
We'll use the following example to look at how to process the retrospective leave.
Anna is a salaried employee and took a day off as annual leave. The leave application was not submitted until after payroll had been processed.
How can an Admin User resolve Anna's Leave application and ensure her record reflects the leave redeemed?
- Manage the Leave application by selecting 'Deduct from employee leave balance' when approving.
- Confirm that the correct amount has been deducted from the Leave History and Entitlement balance shown on the employee's profile.
Before selecting to deduct from the leave balance, consider the following:
- You are not able to adjust the payslip and add Leave Redeemed hours, as well as approve the leave application. This would result in duplicate hours being reported in the Time Off menu for the employee and in reporting.
- This method removes the need to adjust the entitlement balance as it is handled automatically. It does then remove some of the visibility offered by having that present on the payslip.
- If your salaried employee needs to be paid Leave Loading, this process would not be best suited. Instead, refer to the 'Added to payslip' process below.
If your salaried employee has not submitted a leave application, but you need this to reflect on their payslip and reduce their entitlement balance, this can be actioned by adding the leave hours directly to the employee's payslip rather than actioning it from the Time Off menu.
When you choose to add leave to a payslip, the following will be actioned:
- The leave hours will be added to the Time Off menu in an approved state
- The leave hours will be deducted from the entitlement balance
- The employee will have 2 payslips to show a clear history of the changes made and the leave that has been taken
- The employee will be paid for the leave specifically
To add directly to the employee's payslip:
- Navigate to Payroll > Pay and locate the employee's existing Generated payslip.
- From the drop-down next to the payslip number, select Create Adjustment.
- Reduce the hours paid by the amount that will be covered by leave.
- Select + Add > Entitlements to add the leave entitlement used and the amount redeemed.
- Once the payslip has been updated, select Adjust and add any comments you might want to let the employee know, or keep for internal audit records.
- You will need to generate the adjustment payslip to update the employees' leave balance and accruals. Admins and employees will be able to see 2 payslips for the pay period.
SCENARIO
We'll use the following example to look at how to process the retrospective leave.
Romeo is a salaried employee and took a day off as annual leave. No leave application was submitted at all.
How can an Admin User resolve Romeo's Leave application and ensure his record reflects the leave redeemed?
- As no leave application was submitted, adjust the employee's existing Generated payslip and reduce the hours paid.
- Add in the entitlement and amount used towards leave.
- Update and generate the adjustment payslip; this will provide the employee with a 2nd payslip that is visible in their Employee App.
Before adding Leave directly to the employee's payslip, consider the following:
- This method removes the need to adjust the entitlement balance as it is handled automatically through the payslip adjustment.
- If you have a leave application in Time Off and want to follow this process, you can delete the application, or Approve and mark it as 'Handle Manually'.
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If there was no existing leave application, following this process will result in the hours redeemed being reflected in reporting and on the Time Off page.
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- If your salaried employee needs to be paid Leave Loading, this process is best suited.
Non-salaried employees
Before managing or applying for retrospective leave, it is important to understand how it works. Please consider the following points before deciding which method is best for you.
- If the payslip is in a draft state, approving a leave application will add those hours to the payslip. You will not need to reprocess the payslip.
- If the payslip has been processed, approving a leave application will create a new draft payslip for the period end the leave falls in.
- Leave added to a new draft payslip will not affect the award interpretation of the hours already processed.
When managing retrospective leave for non-salaried employees, it is slightly more straightforward, with only 2 process options available to you. The process you choose depends on your business considerations and how you would like to handle the leave.
To manage leave applications that come through after you have processed your payroll, you can either:
- Approve the leave application
- Add directly to a payslip through an adjustment
Read through each tab below to understand the 2 different ways you can manage retrospective leave for your non-salaried employees.
Retrospective leave can be submitted and approved via the Time Off menu at any time after payroll is processed.
When you approve a retrospective leave application, the following will be actioned:
- The leave application will be approved
- A new draft payslip will be created with the leave hours on it
- Once the draft payslip is processed:
- The leave hours will be deducted from the entitlement balance
- The payslip will reflect that leave has been taken
- The employee will be paid for the leave
To approve and pay a retrospective leave application:
- Locate and approve the pending leave application.
- Navigate to Payroll > Pay and locate the new Draft payslip that would have been created upon leave approval.
- Follow your regular payroll steps to generate the payslip and pay the employee.
SCENARIO
We'll use the following example to look at how to process the retrospective leave.
Aimee is a permanent employee and took a day off as annual leave. The leave application was not submitted until after payroll had been processed.
How can an Admin User resolve Aimee's Leave application and ensure her record reflects the leave redeemed?
- Approve the pending leave application; doing this will create a new Draft payslip for the employee.
- Generate the payslip and upload the new ABA file to your bank. Your employees will now have 2 payslips visible to them in their Employee App.
Before approving the retrospective leave application and generating a new payslip, please consider the following:
- The draft payslip must be processed for the leave to be paid and the entitlement balance to be deducted.
- The employee will have 2 payslips for the period.
- The leave will not affect hours already paid.
- If the award interpretation would be different with the inclusion of leave hours, this is not handled automatically (e.g., if any overtime is to be applied).
- If leave should be paid instead of hours worked, those hours will need to be manually removed.
Leave hours can be added directly to a payslip instead of being actioned through the Time Off menu.
When you choose to add leave to a payslip, the following will be actioned:
- The leave hours will be added to the Time Off menu in an approved state
- The leave hours will be deducted from the entitlement balance
- The employee will have 2 payslips to show a clear history of the changes made and the leave that has been taken
- The employee will be paid for the leave specifically
To add directly to the employee's payslip:
- Navigate to Payroll > Pay and locate the employee's existing Generated payslip.
- From the drop-down next to the payslip number, select Create Adjustment.
- Reduce the hours paid by the amount that will be covered by leave.
- Select + Add > Entitlements to add the leave entitlement used and the amount redeemed.
- Once the payslip has been updated, select Adjust and add any comments you might want to let the employee know, or keep for internal audit records.
- You will need to generate the adjustment payslip to update the employees' leave balance and accruals. Admins and employees will be able to see 2 payslips for the pay period.
Please note: If adding leave redeemed increases the employee's net pay, a new ABA File will be created with the value of the difference, for you to upload to your financial institution.
SCENARIO
We'll use the following example to look at how to process the retrospective leave.
Lisa is a permanent employee and took a day off as personal leave. No leave application was submitted, and payroll has been processed already.
How can an Admin User resolve Gemma's leave application and ensure her record reflects the leave redeemed?
- Adjust the employee's existing Generated payslip and add the entitlement used and redeemed.
- Update and generate the adjustment payslip; this will provide the employee with a 2nd payslip that is visible in their Employee App. If this has increased the employee's net pay, download the ABA file generated upon the update and upload it to your bank to pay the difference.
Before adding directly to the employee's payslip, please consider the following:
- You are not able to adjust the payslip and add leave redeemed hours, as well as approve the leave application. This would result in duplicate hours being reported in the Time Off menu for the employee and in reporting.
- If you have a leave application in Time Off and want to follow this process, you can delete the application.
- If the award interpretation would be different with the inclusion of leave hours, this is not handled automatically. However, editing the payslip or creating an adjustment allows you to handle this all in one go.