In today's computerized environment, many vacation accrual calculations are made automatically in the organization's human resources software program. However, not all companies use such a software program. Instead, they may use a vacation accrual spreadsheet in a program such as Excel to track the vacation each employee has earned. The calculations should be verified to ensure employees get the correct amount of vacation hours and that the company only pays for the correct number of hours.
Review your organization's vacation accrual policies. Determine whether accrued vacation can be carried over from previous years and if so, whether there is a limit. Determine how much vacation is earned per pay period and whether an employee's length of employment has any impact on the amount of vacation that is earned.
Verify that the spreadsheet includes carried over vacation hours in the accrual.
Check the calculation for the accrual of vacation based on the proper amount accrued per pay period for each employee. For example, an employee who earns 10 vacation days a year earns 10 times the number of hours worked each day. So if you work 8 hours a day, the employee earns 80 hours of vacation time each year. If you work 7.5 hours a day, the employee earns 75 hours of vacation time each year.
Calculate the amount of vacation hours that should be accrued each pay period. For example, if your employees are paid bi-weekly, there are 26 pay periods in a year. 80 hours of vacation time earned over 26 pay periods means that the employee should accrue 3.077 hours of vacation time per pay period (80 divided by 26 is 3.077).
Verify that the spreadsheet subtracts vacation hours that are used in a pay period. For example, the employee may earn 3.077 hours of vacation pay in a pay period but use 8 hours of vacation pay in that pay period. The spreadsheet should show a "credit" of 3.077 vacation hours and a "debit" of 8 vacation hours for a total accrual for that pay period of -4.923 vacation hours. The spreadsheet should keep a running tally so that you and the employee know how many vacation hours the employee has available at any time.
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