Payroll reports: Vacation liability
The vacation liability report shows the company's liability for the vacation that the employees are entitled to take.
Vacation liability⊠Who actually owes whom?
The vacation liability report shows the companyâs liability for the vacation that the employees are entitled to take. Even if the employees have taken advance vacation, it is specified here. See below what each column means.
What do the columns in the vacation pay liability mean?
It is fairly obvious that the employeeâs name and vacation entitlement are specified, but the columns after that may need a closer description. There are three larger headings and then a number of subheadings. We explain everything for you below!
Basis for the same salary rule
The information under this column applies to the majority of companies that earn vacation. If the employees have a fixed monthly salary, these are the columns you look at to understand what the liability per person consists of.
1. Liability (days)
The three columns specified under this heading concern paid days only. Only paid days are a liability from the company to the employee. The employee can take unpaid days according to their vacation entitlement, but that only generates a deduction for the person and therefore a lower amount to pay out on the next salary. For the company, taking unpaid vacation days in turn means a lower cost, because the salary becomes lower for the month.
1.1 Saved
This is the total number of saved paid days that the employee has not taken and has therefore saved from earlier vacation years.
1.2 Remaining this year
These days are the paid days that the employee has left to take during the vacation year, earned and ready!
If you earn vacation days continuously and can also take them during the same period, the figure you have remaining this year will vary when you look ahead in time. The more days you have worked during the year, the more vacation you also earn.
1.3 Earned for the coming year
For the companies that earn vacation in the same year as the employees may take the days that have just been earned, this column is not of much value.
If, on the other hand, the vacation year and the earning year differ, this column shows the value of your days that may be used when the next vacation year starts. The vacation year often runs by calendar year, January to December, or from April to the end of March.
2. Advance
Where an employee has taken advance vacation, this is shown here. Advance vacation can only be taken if someone with permission to the employment contracts has actively entered that the person is entitled to advance days. Advance days are a receivable that the company has from the employee, so not a liability, but they are still specified in the report. The receivable for an advance day arises because you get to be off without a deduction from your salary. You have therefore not earned the day you are off, which is why the amount for the advance is booked as a receivable that the company has from you.
3. Monthly salary
The monthly salary shown in the report is the salary that the employees have today. In other words, not at the time of earning, but the liability is always calculated on the latest monthly salary. If the salary changes, the liability is settled through the monthly booking of the vacation pay liability, which happens automatically. However, the employment rate that applies at the time of earning always affects the vacation liability itself. If you worked 50% during a certain period, you have not earned days corresponding to full time. So if you start working 100% and take a vacation day, it will look like this:
1. You get a deduction for the day you are on vacation, because you are absent from work. If you work 100%, corresponding to 8 hours a day, you get a deduction for your 8 hours of absence for the day.
2. You will get vacation pay for the day you are away. This pay is taken from the paid vacation that you have earned. However, you have only earned a 50% working day, so the supplement will correspond to the employment rate at the time of earning.
3. With paid vacation a vacation supplement is also paid, at the percentage that the company has agreed. Often 0.43% or 0.8% of the monthly salary according to practice.
For those who have not changed employment rate over time, the deduction and the vacation pay are the same amount, and the only thing visible on the payslip is the vacation supplement.
4. Percent %
Under this percent sign it says how large a share of your monthly salary a vacation day is worth. A whole paid vacation day is worth 4.6% of your monthly salary according to practice. The vacation supplement that you are also entitled to is at least 0.43%, but not at all unusual 0.8%. It is then common that it says 5.4% or 5.03% in this column in Kleer. Simply the total value of an earned vacation day, including vacation pay and vacation supplement.
5. Liability
This column shows the whole liability that the company has to the employee, which is calculated as follows:
Monthly salary(the value of 1 paid vacation day in percent)Total number of paid days (saved, remaining this year, earned for the coming year)-any advance days = The vacation liability
Basis earned (for example commission and the percentage rule)
When an employee is paid by the hour for more than three months and is scheduled weekly, they are entitled to paid vacation when they are off, just like an employee with a monthly salary. The employee then earns a vacation fund/pot that they get to draw on when they have vacation. The pot consists of a certain percentage of the total gross salary the employee had in the previous earning year. The percentage depends on how large a vacation entitlement the person has.
This column shows the vacation pot the employee is entitled to.
Basis for annual payout of vacation supplement
A more unusual case, but for those who want to have their vacation supplement paid out per year, the liability is specified separately in the following columns: âEarned (days)â, liability, percent.
The result column
The total amount corresponds to the liability for the days, and employerâs social security contributions are a certain percentage of the liability, like the social security contributions on your regular monthly salary.
Who can see the vacation liability report?
Finance managers
Finance manager is the role for the person who should be able to see everything in Kleer, often the CFO, the CEO or a finance administrator. That permission includes this report too.
Full read access
Your auditor, potential investors and board members. There can be people around your company who should be able to see all the accounting and all the information, but not be able to do anything administrative in the system. They see all parts of the system, and therefore this report too.