Good news! Leave encashment (calculating unused leaves for resigned employees) can now be calculated automatically in Talenox. 😁
In order to enable leave encashment feature in Talenox, head over to Profiles > Company Details > Payroll Details. Thereafter, click on the Edit button and choose "Enabled" option in the "Leave Encashment Settings" field.
To process leave encashment in Payroll, you can follow the steps below:
Step 1: Enter the Resign Date in the employee's profile.
Step 2: Annual leave balance will be auto-prorated after that.
Step 3: When processing payroll, do choose "Leave Pay" item under Ad Hoc Payment/Deduction tab. The prorated annual leave balance will be synced over to payroll to auto-calculate the leave encashment.
Step 4: Once leave encashment is fully processed in payroll, the prorated annual leave balance will be reduced to 0 days and the deduction will be indicated under "Taken & Adjusted" display.
This is to indicate that the prorated annual leave balance is already paid out along with the employee's salary.
Step 5: The adjustment of prorated annual leave balance (after leave encashment) can be tracked under Leave Balances > Employee Name > Adjust Leave tab:
NOTE: Do not edit the Remarks section - “Annual Leave Encashment” as this might affect the automation process of the new leave encashment field in payroll.
Calculating unused leaves for existing employees (non-resigned employees)
Below are the formulas that you can use for leave encashment calculation if you are processing for non-resigned employees (current active employees) in payroll:
Formula: (Monthly Gross rate of pay** x 12 months) / (52 weeks x number of working days each week) x No. of leave days left to encash
Formula: [(Monthly Gross rate of pay** x 12 months) / 365 days] x number of leave days left to encash
Thereafter when processing payroll, do choose "Leave Pay" item under Ad Hoc Payment/Deduction tab and enter the leave encashment amount:
For our Malaysia users, please note that Leave Pay will be calculated according to Ordinary Rate of Pay (26-day ruling). You can refer to this article to learn more about the calculations for this.
**NOTE: Do ensure that your calculations of Gross rate of pay includes allowances that an employee is entitled to under a contract of service. (MOM)
However, MOM also recommends that allowances to be excluded from Gross rate of pay calculations are as follow:
Now, you'll be able to encash leave like a pro 👍