Leave Paid Out

When an employee’s service ends, employers are required to pay out any annual leave that they have accumulated and not taken. This can be done by clicking on Add (next to Payslip Inputs) > Leave Paid Out.

The system uses the normal annual leave rate to calculate the payment due. You can override this rate completely on this screen by checking Override calculated rate and entering the rate you would like the system to use. You should override the rate if this employee has additional benefits such as employer contributions to medical aid or retirement funds, as this is not taken into account by the system.

If the employee is on a leave entitlement policy where their full leave entitlement is given upfront, the leave balance that will be paid out will be pro-rated. The pro-rata leave balance is calculated as follows:

(Number of completed months of service ÷ 12 months) × Number of days of annual leave entitlement

If the above calculation results in a fraction, this is rounded down if the fraction is less than 0.5 or rounded up if it is equal to or greater than 0.5