NZ Payroll: Automatically calculate four-weekly ordinary hours
At the moment Xero Payroll calculates OWE by using information from the pay template only. Xero Payroll also recommends use of minimum hours as best practice, and allowing the hourly rate to lift if the average is higher than minimum hours. Works well. However, many employees have minimum hours and work more hours regularly, but they don't always work the same number, they might have periods of more work, and other periods of less. This means they don't actually have Standard Hours, and according to the legislation, OWE should be calculated from a 4 week average, not just taking "Standard Hours". By Xero Payroll not having the ability to look at a 4 week average, it is quite conceivable that an employee will not be paid out Annual Leave correctly. This would happen if the employee has worked a high number of hours in the most recent 4 weeks before taking AL, but the 52 week average is lower, and the standard hours are only set to minimum. There is currently no warning I can find about this, and even if there was a warning it would mean the payroll officer having to check work patterns every time AL is taken, and manually calculating if the 4 week average is higher than Standard Hours, or 52 week average. This is clearly not compliant with NZ legislation. I suggest there should be an option to tick a box where Standard Hours are not in fact standard - to request that Xero compares the standard template hours to 4 week average earnings. Not for all employees as some do have recognised Standard Hours.
Helen Schafer
shared this idea
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Justene King
commented
Yes! This.
Most employees dont work regular hours. There needs to be a calculation in the leave review Tab that shows OWP, average of last 4 weeks and average of last 52 weeks(which its shows already)
You shouldn't have to run a Gross Earnings report to see the average of the last 4 weeks. -
Nadine Hyslop
commented
Currently Xero have a lot of complaints regarding Annual Leave having to be manually calculated and adjusted every time an employee takes AL, unless they work set hours every week.
Our workplace work varied hours every week, but in the winter its the minimum hours in their contract (40 hours). The AWE that is calculated and compared with OWP on the pay run is incorrectly calculating their average hourly rate by using this minimum rate (under employee information) and not actually using all the hours we have been entering under the payslips or timesheets every week! If we can pull the pay history report showing these figures, why is Xero not using this in the calculations??
We have been grossly overpaying Annual Leave because of this failure, and the assumption all the information entered into Xero was actually being used for this.
I feel for any larger business that uses Xero payroll and has to do this manually EVERY time! -
Samantha Witt
commented
This affects many of our clients who have staff who do various hours due to changing rosters.
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Michelle Zehnder
commented
Currently this requires manual calculations for employees affected Which is most of our staff due to on call and overtime rates. Please consider.
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Ann Malcolm
commented
This needs to be actioned so that you are meeting legislative requirements which we have commented on several times as Xero isn't performing currently. Need to have flexibility for those who are part time/flexible hours if you want people to use this product and pay employees correctly - large fines can be imposed if employer isn't paying correct (which really is a Xero problem)!
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Ann Malcolm
commented
Can Xero payroll be amended so you can have the ability to pay the higher of 4 wk vs 52 week for Annual leave as per NZ legislation requirements when employees are paid extra payments regularly. This would then comply with legislation because it isn't compilable currently. You should not have to manually have to run a report or keep adjusting leave to make this 'fit' for employees who need this option available for Annual leave payments. Also can Xero look at setting up days for leave, not hours - to include Alternate leave which should be recorded in Days and not hours, also per legislation when comes to paying out.