Leave pay over 60 years for Svalbard payroll

Owned by Sigrid Kviteberg
Last updated: Dec 22, 2022 by Daria Chebotaieva
7 min read

This article explains the Leave/ Holiday Pay setup for Norwegian and Svalbard payroll calculations.

Problem

Some companies have employees that earn both Svalbard wages and regular Norwegian wages during the year. Leave needs to be earned out of both types of wages and separated for reporting and accounting purposes.

The problem can be divided into two separate items:

  • How to transfer the Svalbard leave pay to next year?
    The issue here is that regular leave pay is calculated during the Close Year routine and is set into dedicated accumulators. The Close Year routine can’t accommodate calculating out the actual leave pay and setting it on a separate accumulator.

  • How to set the limit?
    When paying out the leave pay, it must be paid out on two different entry codes due to Norwegian reporting, however, the total amount should not exceed the 6G amount.

Solution

Separate entry codes and accumulators should be added for Svalbard and regular Norwegian wages.

For Svalbard, there should be two entry codes:

  • One for the payout of the accumulated leave pay balance.

  • Another for transferring the balance from one year to another (since the payment is always carried out in June of the following year)

The entry code that transfers the balance to next year should be added in the last payroll period of the year (e.g. 202213), and to all employees that have had Svalbard wages for that same year.

The Svalbard entry code should take the amount from the Svalbard Leave Pay wages, calculate the actual leave pay amount and move it to set the dedicated accumulator.

If the actual amount has been calculated on a separate accumulator during the year, then that amount can just be copied into this dedicated accumulator.

The dedicated accumulator must be set to not be set to zero during the Close Year routine.

Setup Description

Step 1: Accumulating current leave pay for Svalbard

1. Create a permanent accumulator for Svalbard Leave Pay for crew over 60 years old (current year).

2. Set up the leave pay amount to be collected into this accumulator from all the Svalbard entries (e.g. Basic Wages, Various Allowances). We need only the amount for the crew that is over 60 years old.

In our case, it is stored in Calculated amount 3 ( L63) on the entries.

If you make this setup in the middle of the year make sure that you re-set this accumulator for the pervious periods. https://adonishr.atlassian.net/wiki/spaces/KB/pages/4499963948

Step 2: Transfering leave pay balance for Svalbard to next year

1. Create a new permanent accumulator to transfer the Svalbard Leave Pay balance to next year.

2. Create a new entry code to transfer the Svalbard Leave Pay balance to next year.

3. Under entry code Options set the following →

4. Set the limit. The Svalbard entry code should be prioritized over the regular Norwegian entry. Thus the Norwegian wages Leave pay amount should be reduced if the total goes over the 6G limit.

The limit here is usually calculated based on the global rates: ((GB10 * 6) * GB7)/100 Where GB10 - 1G amount, GB7 - leave pay rate over 60.

We multiply the 1G amount with 6 to get the 6G amount, then we multiply this by the leave pay rate over 60 and divide by 100 to get the right percentage.

In the script of the entry code write the following:

//L63 - calculated amount 3 //W173 - Svalbard Leave Pay balance in current year //setting the limit IF L61 > ((GB10 * 6) * GB7)/100 THEN L63 = ((GB10 * 6) * GB7)/100 ELSE L63=W173 ENDIF ENDIF //Display amount = calculated amount L21=L61

Create a temporary accumulator to compare the amounts from Regular Leave Pay and Svalbard Leave Pay and set the proper limit for the amount. In the script add the following condition:

//W70 - temporary accumulator to compare the amounts //from Regular Leave Pay and Svalbard Leave Pay //L63 - calculated amount 3 (used for leave pay total) //collecting the amount to compare it with the amount //on the regular Norwegian Leave Pay over 60 W70 = L63

 

5. Set proper calculation priority. The entry code for Svalbard Leave Pay must be set with higher priority than the regular Norwegian Leave Pay payment entry code.

e.g. Svalbard Leave Pay - 0, Regular Leave Pay - 5

6. Go to the Accumulator tab for the new entry code. Find the new permanent accumulator and set the formula to zero out the leave pay total when this entry is added @L61*(-1).

Step 3: Setting up entry code for Svalbard leave pay

1. Create a separate entry code to calculate Svalbard Leave Pay for the crew over 60 years old.

2 . The script for Svalbard will only check and reduce the amount to stay within the 6G limit, in addition, a temporary accumulator with the amount must be set. In our example, we will use:

//L61 - calculated amount 1 to be added to Net Wages. //L21 - displayed amount //W174 - permanent accumulator for the Svalbard Leave Pay (previous year) //pay out the balance from last year L61=W174 ENDIF //Display amount = calculated amount L21=L61

 

3. Set proper calculation priority. The entry code for Svalbard Leave Pay must be set with higher priority than the regular Norwegian Leave Pay payment entry code.
e.g. Svalbard Leave Pay - 0, Regular Leave Pay - 5

Step 4: Adding limit on regular Leave Pay

1. The Svalbard entry code should be prioritized over the regular Norwegian entry. Thus the regular leave pay amount should be reduced if the total goes over the 6G limit.

The limit here is usually calculated based on the global rates: ((GB10 * 6) * GB7)/100
Where GB10 - 1G amount, GB7 - leave pay rate over 60.

We multiply the 1G amount with 6 to get the 6G amount, then we multiply this by the leave pay rate over 60 and divide by 100 to get the right percentage.

2. In the script for regular leave pay, we check if there is any amount left within the 6G limit to be paid out.

 

3. Set proper calculation priority. The entry code for Svalbard leave pay must be set with higher priority than the regular leave pay payment entry code.
e.g. Svalbard Leave Pay - 0, Regular Leave Pay - 5

Step 5: Close-year setup for accumulators

Go to the Organization Structure > selected crew pool > Payroll > General and set the “Svalbard Leave Pay over 60 (previous year)” accumulator to not be zeroed at the year’s end.

Close year procedure

  1. Close the final payroll month, but do not close the year yet.

  2. In the period that opens after the last one add the entry code “Svalbard leave pay balance to next year” for all persons that worked in Svalbard. In our example, it is entry code 516.
    You can use the https://adonishr.atlassian.net/wiki/spaces/KB/pages/3216966334 to add the entries for all.

  3. Calculate payroll for all those crew members.

  4. Check that the value from the “Svalbard leave pay over 60” accumulator is transferred to the “Svalbard leave pay over 60 (previous year)” accumulator. In our example, it is accumulators 73 and 74.

  5. Once you verified the data perform the Close Year procedure.

Paying out the accumulated Leave Pay

In June all the Norwegian companies are to pay out the accumulated Leave Pay for the previous year.

To do this:

  1. Open the correct organization and crew list view that shows all persons that worked in Svalbard last year.

  2. Open https://adonishr.atlassian.net/wiki/spaces/KB/pages/3216966334 and add the “Svalbard leave pay over 60” entry code to all those people. In our example, we use the entry code 514.

  3. Calculate payroll for all.

  4. Check the amounts.

  5. Check the accumulators. Make sure that the “Svalbard leave pay over 60 (previous year)” is zeroed out.