Leave provision Accounting
I am trying to pass Annual Leave provisions from payroll to GL as Leave encashment is a common practise in UAE.
Scenario:
Company Options Setup
8 hours per day, 5 days per week and 52 weeks in a year. 2080 hours per year.
Annual Salary = 60,000 ( Hourly rate = 28.84)
Annual Leave Accrued per month = 2.5 days
Annual leave provsion to be passed =60000/365*2.5 = 410.9
Now, If the employee takes leave for 2.5 days, we are expecting the same amount to be credited from his Leave accrual account.
But system will calulate during autopay - Vacation amount as hourly rate*std hours per day * leave days = 28.84*8*2.5 = 576.9
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Provision passed by the company is calculated based on 365 days as the company will have to encash 30 days of salary and not only working days.