Explaining Leave Pay (LP)

The Leave Pay (LP) function is activated when employees are being paid in advance for the period(s) he/she will be going on leave. This system functionality is to ensure that the PAYE is calculated correctly based on the total remuneration being paid, for the number of periods/weeks of leave.

Leave Pay is activated for the following reasons: 

- The correct tax calculation is applied 

- Deductions are multiplied by the specified number of weeks of  employee leave (except Pension and Provident Fund) 

- The employee’s Payslip Screen is automatically frozen for the number of periods that the employee is away to prevent duplicate processing
 

Note: Leave pay is only applicable to weekly and bi-weekly payrolls.

In bi-weekly companies, the setup is more complicated. Methods must be tested to ensure that the calculations are correct.