All Canadian employees are entitled to "Vacation Pay" and "Vacation Time." Vacation pay automatically accrues when you run payroll in Humi. Humi calculates this amount by multiplying "Vacationable Earnings" by the compensation's "Vacation Pay Percentage," and the resulting dollar amount is added to the employee’s vacation pay balance.
What are "Vacationable Earnings?"
An employee's compensation can take many forms, but payment for time worked is the most common. Employees can, however, be compensated in other ways, such as with benefits, bonuses, commissions, and so on.
Provincial legislation defines if a type of compensation is a "vacationable earning" or not. Find more information about vacationable earnings by province here.
Calculating vacation pay on "Other Income"
In Humi, an employee can have many compensations, and each compensation can have its own vacation pay percentage.
When an employee earns "Other Income" that's considered "Vacationable Earning," Humi will use the highest vacation pay percentage from their compensations to calculate the vacation pay accrual amount.
How to payout "Vacation Pay" in Humi
There are three earning types in Humi that allow employees to receive their vacation pay.
If the vacation payout method is set to "Payout accrued vacation pay with every payroll" employees will be paid out each payroll under the earning type: "Vacation Pay."
If the vacation payout method is set to “Accrued vacation pay will be banked in Humi,” there are two income types that you can use to payout vacation:
- "Vacation Payout - Time Off"
- "Vacation Payout"
Learn more about how to set up vacation payout methods here.
Vacation Pay
If you've set the employee's vacation payout method to "Payout accrued vacation pay with every payroll," they will automatically receive their accrued vacation pay with each pay run.
When you run payroll in Humi, you'll see this amount in the "Vacation Pay" field under the "Extra Pay" column.
Your employees will see this amount on their paystub in the "Vacation Pay" section.
"Vacation Payout - Time Off" income type
If an employee’s vacation payout method is set to “Accrued vacation pay will be banked in Humi,” then you can add vacation "Hours" to their pay using the income type "Vacation Payout - Time Off."
To enter vacation hours, follow these steps:
- On the "Run Payroll" screen, find the employee needed and click "+ Other Income."
- Under the first section, "Income types based on the regular hourly rate," find the "Vacation Payout - Time Off" field.
- Enter the number of vacation hours the employee used.
- Click "Save."
Humi will calculate the vacation pay amount and subtract it from the employee’s balance when the payroll run is completed.
Important note
If you don’t see the "Vacation Payout - Time Off" income type in the "Other Income" list, this means that you need to add it to your payroll. Click here to learn how to add Income Types to Humi Payroll.
Under the "Vacation Payout - Time Off" income type, Humi displays the employee's "Vacation Pay Balance" in yellow. This allows you to easily see if the employee is taking more vacation time than they've earned. Currently, an employee can go into a negative vacation balance if they use more vacation time than they've earned.
"Vacation Payout" income type
If you need to payout the employee's vacation pay in a dollar amount when they haven't taken time off, you can use the income type "Vacation Payout."
To payout vacation earned in a dollar amount, follow these steps:
- On the "Run Payroll" page, find the employee need and click "+ Other Income."
- Scroll down to the "Income types with dollar amount" section.
- Enter the dollar amount in the "Vacation Payout" field.
Humi will calculate the vacation pay amount and subtract it from the employee’s balance when the payroll run is completed.
Important note
If you don’t see the "Vacation Payout" income type in the "Other Income" list, this means you need to add it to your payroll. Click here to learn how to add Income Types to Humi Payroll.
Under the "Vacation Payout" income type, Humi displays the employee's "Vacation Pay Balance" in yellow. This allows you to easily see if the employee is taking more vacation time than they've earned. Currently, an employee can go into a negative vacation balance if they use more vacation time than they've earned, as shown in the screenshot above.
You are now prepared to pay vacation pay in Humi; for more information on vacation pay, see the links below.