Finalising an absence allowance is the process of closing an allowance by making a payment for the remaining balance. Finalising absence allowances is an important step when an ending an employment. The most common example is finalising a leaver's holiday allowance (known as 'pay in lieu of holiday').
⚠️ An allowance becomes locked when it's been finalised. For example, if an employee's holiday allowance has been finalised, no holiday records can be added or cancelled for them, and they can not accrue any further holiday.
Finalising an absence allowance
Find the employee's profile
Click Absence > Allowances
Identify the allowance you wish to finalise. In most cases, this will be an active allowance (for example, the employee's current holiday allowance)
Click Options > Finalise
Complete the form and click Save. The payment will appear on a Payroll Export once the period in which the chosen applicable date falls has been signed-off, associated with the chosen pay element
Guidance for calculating the payment
This section uses the example of finalising a holiday entitlement.
To help you calculate the payment to be made, Rotaready will display the accrued holiday entitlement, the amount of holiday used, the employee's pay rate, and if relevant, the employee's average hours per working day.
Rotaready doesn't calculate the payment for you automatically because businesses have different policies for how this should be done. If you aren't sure how to calculate this payment for your business, you should refer to your HR / payroll team. That said, most businesses will take the approach outlined below.
Allowance in hours
Allowance in days
Hourly paid staff
Remaining balance x Pay rate
Remaining balance x Pay rate x Average hours per working day
Remaining balance ÷ Average hours per working day x Salary per day
Remaining balance x Salary per day
⚠️ Be particularly careful if the employee has a negative remaining balance (i.e. they have booked more holiday than they have accrued). Some businesses will make a deduction on the payslip, others will make no adjustment. If you need guidance, consult your HR / payroll team and the employee's employment contract.
Other reasons to finalise an allowance
From time to time, an employee may change contract type and need their allowance type changed. For example, if an hourly paid employee is promoted into a salaried role, their holiday accrual schedule may need to change too. In this situation, it's best to finalise the active holiday allowance before creating the new allowance.