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Time in lieu is a type of leave that isn't specifically covered by the Holidays Act 2003. Prior to the Holidays Act 2003, days accrued for working on a public holiday were known as "day in lieu" or "lieu time". But since the implementation of the Holidays Act 2003, they're now known as Alternative Leave.

When an employee works extra hours, they can either be paid overtime or they can take the equivalent time off at a later date. This often depends on company policy. In a company, this is sometimes done informally, and at other times it's managed quite formally. Some employers find using time in lieu to be a useful strategy and needs to be managed carefully.

The following steps will enable Time in Lieu to be setup and applied to an employee.

To set up time in lieu
  1. Set up an Entitlement as per the image below.

    The Accrued from detail will be added in a later step.

  2. The next step is to setup 3 different pay items:
    • TOIL Accrual - Needs to be Accrued Pro Rata
    • TOIL Taken
    • TOIL Calculation - this pay item will ensure that this is not paid in the pay that TOIL is accrued and that it doesn't show on the payslip.

  3. Update the "Accrued from" field in the TOIL entitlement and set it to accrue from TOIL Calculation.

    Update the Pay item liabilities as required.

  4. Add all 3 items to the employee's standard pay details.

     

  5. Enter the Hours of Time in Lieu the employee has accumulated in the Quantity column against the TOIL Calculation pay item in the Current Pay.
  6. The balance is shown in the Entitlement Balances report and can be paid at a later date using the TOIL Taken pay item in the current pay.

 

Article ID: 38862
Australia
New Zealand