How to Calculate Annual Leave Pay in F&B?

As a diversified city in Hong Kong, the F&B industry has always been one of the important pillars of its economic development. The F&B industry is highly mobile, and employees often leave their jobs. However, the calculation of annual leave pay has always been a pain point faced by the F&B industry because it involves multiple variables. When an employee resigns, annual leave pay needs to be calculated based on the employee’s remaining annual leave days, but unlike AL ​​Balance Days, the employee needs to be deducted the balance of leave paid during the period of non-employment in the year of resignation makes it even more difficult to accurately calculate annual leave pay.

This article will discuss how to accurately calculate severance annual leave pay for the  F&B industry. See the efficient solution provided by Workstem’s one-stop human resources management system!

How is salary compensation typically structured  in the F & B industry?

In  the F & B industry, the final pay usually consists of basic salary, remaining annual leave pay, etc. The basic salary is the employee’s fixed income, while the remaining paid annual leave compensation is additional compensation that fluctuates based on the number of remaining annual leave days of the resigned employee. When have the final pay, What are the pain points in the F & B industry?

• Various calculation methods and high complexity

When an employee resigns, annual leave pay needs to be calculated based on the employee’s remaining annual leave days, but unlike AL ​​Balance Days, the balance of leave paid during the absence of the employee in the year of resignation needs to be deducted.

• The data is complex and accuracy is difficult to guarantee

The annual leave pay of resigned employees involves a large amount of data, such as the number of remaining annual leave days calculated by the system when the employee leaves the company (before deducting the annual leave balance during the period of absence), the number of annual leave days that the employee should enjoy this year, and the number of annual leave days after deducting the annual leave balance during the period of absence. The number of days for calculating annual leave pay is overwhelming, and its accuracy directly affects the calculation results of annual leave pay.

• Calculating manually or using traditional methods is inefficient

Using traditional methods such as manual or Excel to calculate annual leave pay will undoubtedly require multiple calculations and checks. If the calculation is incorrect, the form will need to be modified repeatedly, which is time-consuming and labor-intensive. More seriously, it will affect the interests of employees and may lead to unnecessary labor disputes.

Have you also encountered the above problems? How can we accurately and efficiently calculate separation annual leave pay?

How to accurately calculate annual leave pay in the  F & B industry？

Let’s take a look at the following restaurant & bar cases. Workstem will give you an in-depth understanding of the calculation of annual leave pay in the F & B industry.

When a restaurant & bar employee resigns, annual leave pay needs to be calculated based on the employee’s remaining annual leave days, but unlike AL ​​Balance Days, the balance of leave paid during the absence of the employee in the year of resignation needs to be deducted. The detailed rules are as follows:

• Only employees who have been employed for 90 days will receive annual leave pay.
• When an employee resigns, the annual leave taken during the period of non-employment needs to be deducted from the remaining annual leave balance:
• If you join the company before this year and leave this year, you will be granted additional annual leave from the date of resignation to December 31 at the end of the year;
• If you join this year and then leave your job, the annual leave before joining will not be paid. Additional annual leave will be paid after deducting the date of resignation to December 31 at the end of the year.
• The number of annual leave days shall be rounded to two decimal places.
• If the number of days of annual leave remaining after deduction is negative, the result is taken as the nearest integer greater than the result. For example, the calculation result is -1.56 days, and the result is -1 day. When calculating, the result is recorded as negative for deduction.
• When calculating annual leave pay, the larger of the ADW of the month in which the date of resignation occurs and the “monthly salary/monthly calendar days” is used;
• When calculating the number of calendar days in this year and the number of calendar days in the month of resignation, the actual number of days shall be used. That is, the number of days in leap years is 366, the number of days in February is 29, and the number of other months is based on the actual calendar days.
• Sometimes an employee’s annual leave pay may not be calculated in the month of resignation, but in the month after the employee leaves the company.
• When there is a lag, the calculation is still based on the greater of the average daily basic wage in the month of resignation and the ADW in the month of resignation.

The annual leave rules for this restaurant & bar also vary based on years of service, as shown in the table below:

 Length of service Number of days of annual leave available 0 7 1 7 2 8 3 9 4 10 5 11 … …

Calculate the annual leave pay that employees should receive by calculating different employees, different entry dates, resignation dates, basic monthly salary, and remaining paid annual leave days.

If there is only this one employee, HR may be able to control such a large-scale salary calculation, but if multiple employees leave and the salary calculation standards are different, it will be a huge workload!

Referring to the above cases,In order to reduce errors in the calculation of annual leave pay and improve work efficiency, bars and restaurants can summarize some methods to efficiently calculate annual leave pay. Here are some suggestions:

• Establish clear rules for separation and annual leave pay

Establishing clear separation annual leave compensation rules can help employees understand the calculation methods and standards for separation annual leave compensation and reduce misunderstandings and disputes.

• Develop a clear formula for calculating annual leave pay after leaving office

The calculation of annual leave can be regarded as the most complicated type of leave among so many, because it not only involves different contents such as entry date, probation period, reason for leaving, vacation year, etc., but also includes the calculation formula, whether the annual leave balance is rounded or how much annual leave pay is retained. decimal places and other details. The catering industry should develop a clear calculation formula for annual leave pay and communicate this to employees to ensure employees understand the source of their income.

• Use professional automation tools

A sound data collection and management mechanism is the prerequisite to ensure accurate calculation of annual leave pay. The use of automated tools can greatly improve the accuracy and efficiency of annual leave pay calculations. For example, Workstem human resources management system, when an employee resigns, can calculate the resignation salary together based on the employee’s salary, vacation record or attendance hours (if any). It is indeed simpler than calculating each payment separately and then adding it back. Quite a few, automatically integrates all data to help the catering industry automatically calculate severance annual leave pay, reduce manual errors and save time. Let the bosses of small and medium-sized enterprises no longer be so exhausted. Great recommendation!Workstem automatically calculates wages and improves the efficiency of calculating annual leave pay.

Workstem: streamlining payroll calculation and annual leave pay

Workstem one-stop human resources management system Support automatic obtain the number of remaining annual leave days when an employee resigns, customize the calculation method of annual leave pay, ADW calculation, settlement time, etc., and use the powerful AI calculation engine to calculate according to the annual leave pay calculation formula, and automatically compare salary data , ensure that the calculation of annual leave pay complies with company policies and standards, and pays out efficiently.

In addition to calculating annual leave pay, the Workstem system can also provides a full range of solutions to help the F&B industry business management of other HR processes, such as RosteringAttendanceLeave, MPF and tax return management, etc., help the F&B industry can truly realize digital transformation and improve management efficiency and employee satisfaction.

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