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How to Process Statutory Holiday Calculations in Clarity and use in Payroll

Intro:

Statutory Holidays are a multi-step process in the software and can be handled in different ways.  One method, and by far the simplest, is to pay the employee a full day’s regular wages at their current rate of pay.  The number of hours to pay differs by province and state but the premises is the same.

However, this method may not conform to legislation for the area that you are producing payroll for.  As an example Ontario Statutory Holiday rules are 1/20 of the wages for the last 4 weeks worked.  Therefore if you look at example 1 we can see that an employee who has only worked the week before the stat holiday for 40 hours and 8 hrs per day would be paid less if you went by the Ontario legalisation than just paying them a regular days pay. However, in example 2 if the employee had performed a lot of overtime in the weeks leading up to the statutory holiday they would be owed more money than simple a days wages.

Example 1

ON Example

Hours (last 4 weeks)

Rate

Pay

Gross

Stat Owed

Full Paid Day

40.00

17.50

700.00

NA

$140.00

1/20 of Wages

40.00

17.50

700.00

700.00

$35.00

 

Example 2

ON Example

Hours (last 4 weeks)

Rate

Pay

Gross

Stat Owed

Full Paid Day

176.00

15.00

17.50

26.25

3,080.00

393.75

NA

$140.00

1/20 of Wages

176.00

15.00

17.50

26.25

3,080.00

393.75

3,473.75

$173.69

 

Paying based on legislation:

Clarity provides you are a built-in report to process Statutory Holiday Pay calculations.  This report can be printed to a file and than in-turn imported BACK into payroll for payment processing.

The report will tell you the amount of monies to pay to the employee in dollars only (no hours), therefore in order to use the results of the report you must have a payroll category defined as earning class and regular type in your system. (Flagged as subject to tax accordingly).

The report can be found by going to Reports Payroll Reports Statutory Holiday Pay Report


Calculation Methods:

The Calculation methods can be one five different options being:

a)       One Day regular pay;

b)       Average of last 30 days;

c)        1/20 th of last 4 weeks pay;

d)       Average daily wage in week of holiday; and

e)       10% of the 2 weeks before holiday.

The following chart will show you each of the provinces and which rules apply to each province.

 

NB

NS

PEI

NL

QC

ON

MB

SK

AB

BC

YT

NT

A

X

X

X

X

 

 

X

 

X

 

X

X

B

 

X

X

 

 

 

 

 

 

X

 

 

C

 

 

 

 

X

X

 

X

 

 

 

 

D

 

 

 

 

 

 

 

 

 

 

X

 

E

 

 

 

 

 

 

 

 

 

 

X

 

 

When to run the report:

When to run the report is dependent on what province you are running the report for and the applicable calculation method you have selected to use. 

If you have chosen or will choose to run the report based on “One Day regular Pay” (Option A) the report must be run with payroll un-posted

If you have chosen to run the report on any other option the report can be run based during or after it has been posted.


How the report is calculated (setup):

In order to run the report you must first select the payroll group you want to run this report for.  The report must be run separately for each department.

Then select the holiday date that you wish to pay the employees for seen at the bottom of the image to the right.  Be very attentive of the date that you set as depending on when you run the report you may receive different results when using calculation methods B-E (discussed later). 

The next step is select the “Holiday Pay settings” tab and select the payroll categories that are regular wages and those that are vacation payments.

When processing calculations methods B-E you can select any payroll category.  However, if you are processing a payroll for a “One day pay” category you must only select categories that are defined as “Regular”, “Hourly”, or “Piecework”.  Categories such as “Overtime”, “Formula”, or “Script” will cause a result of “unable to calculate” for the employee using said category to occur. (why later)

The final option is under preferences where you can select the province that you are running this report for, the calculation method you wish to use, and the work week start date.

 

 

 


Calculation of dates for options B-E:

Since options B-E are date specific the software will pro-rate the payroll based on the number of days needed for the calculation.  For example, if your payroll is bi-weekly from Monday-to-Sunday and you run a report for 1/20 th last 4 weeks with a holiday that landed on the 1 st Friday of a pay period the system would do the following.

Pay period including holiday = 4 days

Pay period before holiday = 10 days

Two periods before Holiday = 6 day

The software will than take the TOTAL wages/monies of the categories you selected above and divide them by 10 days in the period to calculate the amount per day in each period respectively.  It would than take that value and multiple it by the number of days in the period it NEEDS to use and finally add them all together and, in this case, take 1/20 th of the final value.

Additional setups if using “One day regular pay” method:

When using the “One day regular pay” option there is an additional setup on the EMPLOYEES MASTER PAYCARD required.  For these employees you must have the base wage category defined, typically the default category used by this employee for his/her payroll.  You will also have to define the employees expected/standard working hours per pay period AND the regular hours per day.  The rate of pay will be calculated by the rate of pay USED DURING PAYROLL or the SALARY BEING PAID divided by the hours per period.  The fact that the rate or salary from the current payroll are being used is why this option MUST be run with the payroll created but un-posted.

Running the report:

Now you can run the report.  The best method for this is to run and enter the information directly into your payroll by either keying in the data manually or importing it as a file.  In order to import the stat pay to a file you must go to Print and when the print dialog opens click the “Print to file” option in the bottom of the screen, set the file type to “TEXT” and enter a file name and location (don’t forget it!)

 

Using the information in Payroll / Setting up import interface for Payroll:

Now that you have a report that shows you how much the employee is owed in Holiday pay you may ask, “how do I get this into payroll now without typing it in?”. 

This can be done by first, setting up the system to accept the report file produced by the software in the above step.

First go to Configuration Interfaces Paycard Import Interfaces.  Here you will click on the + sign to add a new interface giving it a code and name of whatever you feel like.  The File type must be set to “Comma delimited” and there will be NO additional settings selected.

In the second tab you will add two (2) fields to the interface.  The first field will be selected as “Employee ID Number” and will be set too column #1.  The second field will be “Amount of 1 st earning of amount type”.  Before we set the column go to Setup Preferences and open the [Employee] tab.  On this tab you’ll see the “employees name display format”.  If you have your software set to include a “,” in the employees name separating the employees first , middle, and last names than you must set this field to column #7. Otherwise set it to column #6.

Now save this layout and run your payroll.  During the payroll creation process you will select “Batch Paycards” and “option #1” which is to import records from a file.

On the import screen select the interface as you created it above and select your file.  Finally there will be a “CODES” tab at the top of the screen, which you must go into and set the field’s value for “Earning category to use for Amount type 1” to your Stat holiday pay category.  (This category should be defined as a “REGULAR” type code in your category setup)


Common Errors and Issues:

Q: I imported my file but no paycards were created or the Stat holiday category wasn’t defined, why?

A: Sometimes you have to run the importer twice when doing the initial setup in order for the system to commit the assignment of the selected categories to memory.  If you import and get no results/blank paycards delete the paycards and re-run the import.  Make sure to return to the Codes tab and re-assign the category as it would be blank.  NB: Once you have this saved it won’t clear on you.

A2: Another thing is you may have set your “Stat amount” column to 6 when it should have been 7 or vice versa.  Check your employee display preferences as noted above and see if you are including the “,” in the employee name and compare your import interface matches the above rules.

Q: I run the report and it says “Unable to Calculate”, why?

A: The report being unable to calculate for an employee means something is missing in the calculation.  If you are running the report for “One day” method make sure the employees Compensation summary is defined.  Also make sure there is currently an un-posted paycard for the employee.  If you are running for any other method, check the dates and ensure that the employee has a payroll paid/un-posted that would be included in the date range of the report.

1 Comment

  1. Ontario - Old rule (before 2018)