Set up provisions for vacation and time balances
With Provision, payroll and financial accounting define which vacation and time balances SwissSalary values by salary code in the regular payroll run. The system automatically creates salary entries with the Provision posting type and reverses them the following month; during financial posting, SwissSalary additionally creates the offsetting entry for the first day of the following month. Set up period-accurate balance valuation before the first productive posted provision run.
Purpose
- Value open vacation and time balances period-accurately.
- Transfer provision amounts to financial accounting through the salary type account assignment.
- Reverse provisions automatically the following month.
Prerequisites
- The time types and balances in use are tracked in hours or days through posted salary entries.
- The employees have the correct Salary Code.
- Suitable salary types are set up for positive and negative balances.
- The salary types aren't of calculation type calculated and have the required financial-accounting and, if applicable, cost-accounting account assignment.
- The transfer to financial accounting is set up.
Procedure
Prepare provision salary types
Set up salary types for both signs for each required balance type:
- Positive Salary Type for a positive balance;
- Negative Salary Type for a negative balance.
In practice, the same salary type is usually used, and no second one is created.
The provision calculation passes the balance as a quantity to the chosen salary type. The rate, calculation type, and account assignment of the salary type therefore determine the resulting amount and the financial posting.
Wichtig
Don't use a salary type with calculation type calculated. SwissSalary cancels processing if such a salary type is used for the provision.
For both salary types, check in particular:
- calculation and rate;
- account and offsetting account;
- posting group or posting matrix;
- cost center and cost object logic;
- desired effect on salary bases and reports.
Set up the provision
- Open Payroll Setup.
- Choose Related > Provisions.
- On the Provisions page, enter one line for each combination of salary code and balance type.
- Under Salary Code, choose the affected salary code:
- Salary
- Monthly Salary
- Hourly Salary
- Piecework
- Monthly Salary LMV
- Under Balanced, choose the balance type to be valued.
- Enter Negative Salary Type and Positive Salary Type.
- Under Unit, choose Hours or Days.
Under Balanced, the following values are available:
- Vacation
- Overtime
- Mandatory Overtime
- Voluntary Overtime
- Compensatory Time
- Flexible Working Hours
- Productive Time
- Scheduled Time
- Actual Time
- Night Work
Example:
- Vacation: salary type 7830 = vacation provision (Type = Employer Part, Calculation Type = Positive)
- Overtime: salary type 7840 = overtime provision (Type = Employer Part, Calculation Type = Positive)
Tipp
Use the same unit as in your professional balance keeping. With Hours, SwissSalary sums the posted time quantity in hours; with Days, in days.
Calculation during the payroll run
During the regular payroll run, SwissSalary looks for the lines with the person's Salary Code. For every configured balance type:
- SwissSalary sums the person's posted balance;
- considers certain entitlement and departure corrections for vacation and compensatory time;
- chooses Positive Salary Type or Negative Salary Type depending on the sign;
- creates a salary entry with Posting Type = Provision when the balance is non-zero.
If no salary type is stored for the determined sign, SwissSalary creates no provision entry for this line.
The vacation provision is calculated as follows: vacation entitlement up to the end of the settlement month, minus vacation taken, plus the balance carried forward from the previous year, multiplied by the pay rate or the daily rate (depending on whether hours or days are stored). The account assignment and the dimensions are taken into account.
Wichtig
For the vacation provision calculation, the number of vacation days or hours per year is determined by the Absence Claim stored for the employee at the time of Process Payroll.
Example of a vacation provision as of the end of March:
| Item | Calculation | Result |
|---|---|---|
| Vacation entitlement for the year (according to the absence claim) | 200.00 h | |
| Vacation credit up to the end of March | 200 h / 365 days × 90 days (January–March) | 49.32 h |
| Minus vacation taken (January–March) | −40.00 h | |
| Plus balance carried forward from the previous year | +20.00 h | |
| Provision as of the end of March | 49.32 h − 40.00 h + 20.00 h | 29.32 h |
| Provision amount with a pay rate of CHF 25.00 | 29.32 h × CHF 25.00 | CHF 733.00 |
Whether the vacation provision salary type (in the example, salary type 7830 = vacation provision) calculates with the pay rate or the daily rate is defined on the salary type card, on the General tab, in the Salary Rate and Rate per Employment % fields:
- Calculate with the pay rate: Rate per Employment % isn't enabled.
- Calculate with the daily rate: Rate per Employment % is enabled.
For overtime and flextime provisions, SwissSalary multiplies the balance of overtime or flextime hours by the pay rate stored for the employee and posts the result as a provision.
Hinweis
The provision calculation runs in the regular payroll run. Provisional payment and other special run types don't use this processing step.
Check and post the provision
- First run a test payroll run for representative employees.
- Check positive and negative balances and the provision salary type in use.
- Check quantity, rate, amount, account, offsetting account, and dimensions.
- For the definitive run, review the General Ledger Log report and select the Time Balance Provision check box so that the provision lines appear in the log.
- Reconcile the totals by balance type, salary type, and account.
- Post the checked payroll run.
During financial posting, SwissSalary marks provision lines separately. The original posting receives the chosen posting date. The automatically generated offsetting entry receives the first day of the following month and the negative amount.
Wichtig
The offsetting entry is based on the posting date, not on the settlement date. Therefore, before posting, check which financial periods the provision and its reversal fall into.
Special considerations
Vacation entitlement
For active employees, SwissSalary reduces the vacation balance by the pro-rata entitlement for the portion of the calendar year that hasn't yet expired. In case of departures and immediate entitlement corrections, additional correction rules apply.
Compensatory time
For Compensatory Time as well, SwissSalary considers the pro-rata future annual entitlement for active employees. For a departure within the calendar year, an immediate correction can flow into the valuation.
Reconciliation
When the Time Balance Provision check box is cleared in the General Ledger Log report, the report hides the provision lines. The option is only visible when provision lines are set up and you have read permission for them.
Warnung
Don't change provision salary types or units without comparative calculation. A change can affect all employees with the same salary code and change the reconciliation between the time balance, the payroll run, and financial accounting.
Good to know
- If you use a salary type of type calculated as a provision, processing aborts — vacation and time balances are missing from the balance sheet.
- If you store only one sign salary type without positive / negative, no entry is created and the provision remains unposted.
- If you expect provisions in provisional payment or special runs, they don't run — only the regular payroll run creates them.
- If you change the unit or salary types without a comparative calculation, incorrect amounts affect all people with the same salary code.