Do I enter the hours under vacation paid? if paying each pay period

Question

I don't have the payroll module, because I only have 1 employee. I'm still able to use Sage payroll by manually entering the taxes. In the vacation paid box it automatically calculates the vacation amount but the hours are left blank. Do I have to enter the Hours under vacation paid ? We pay our employee vacation pay on each pay period.

C White · Answer

Janine: 
 The 'hours' box when releasing vacation pay is an area where judgement is required. 
 Agate is correct that there are no hours when vacation pay is paid out each cheque. 
 The judgement is required when vacation pay is accrued and only paid out occasionally. You need to put in hours if your particular vacation-payout situation will create 'hours' for EI purposes. 
 Basically, if the vacation pay-out is to cover some paid TIME OFF, you will enter hours (for example, the person usually works 40 hours (5 days) in a week. This week, they worked 8 hours (1 day) and took 32 hours (4 days) off, but they're getting full pay because of drawing down vacation pay. If you were to fill in an ROE for this person, this week would count the exact same as an ordinary work week - 40 hours pay / 40 EI hours. So, you will enter 32 hours in the vacation pay hours slot. 
 On the other hand, if there is no paid time off linked to this vacation payout, you won't enter any hours. The classic example here is an employee who usually works 40 hours in a week, did work 40 hours in a week as usual, but asked for $1,000 out of their vacation pay back because they unexpectedly have to pay for a new engine for their car. The vacation pay is purely money, no time off, so no hours in the vacation pay hours slot. 
 The judgement comes in when things aren't so clear. For example, if someone whose hourly rate is $20/hour takes 32 hours ($640) but wants $1000 of vacation pay... it would seem like you should enter 32 hours in the vacation hours box... but what if they are also planning to take an additional 18 hours off next pay period. Do you put 50 hours in the vacation hours box this pay period (1000/20), or 32 this time and 18 next time? I haven't found any really good answers to questions like these.

Agate · Answer

Janine: 
 I do not believe you need to enter hours for vacation pay if you are paying them their vacation pay with each pay period.

Pier · Answer

C White is correct. Entering hours under vacation paid has to do with EI. For a full review, read Insurable hours - Canada.ca

Pier · Answer

Janine, 
 It is under this tab you enter EI insurable hours. 
 
 So say a new employee works 35h @ 20$/h, then the vacation earned will be 28$. If you pay him/her every week, then you will input 35x4% = 1,4 hr or if you prefer 28/$20$ = 1,4 hr in Vacation Paid Hours and 28$ in Vacation paid amount. Like this: 
 
 Accordingy, EI insurable hours shows 36,4 hours on paystub instead of 35 which is correct 
 Take note the calculations in Vacation earned are made according to the employee record described previously. 
 Hope this answer your question.

Pier · Answer

OK this is getting a little tricky ;-) 
 To me, all this confusion comes from the part of the internet link to Insurable-hours where we read: 
 
 Vacation pay 
 Some employers offer paid vacation leave and other employers offer a minimum 4% vacation pay to their workers. 
 In situations where a vacation request has been approved by the employer, the hours that the person would normally have worked and for which the worker was paid are considered insurable hours. 
 There are no insurable hours in situations where payment is made and no leave has or will be taken. 
 In situations where a worker's vacation pay is paid out on termination of employment, there are no insurable hours.

Example An employer pays a worker 4% of their regular salary at each pay period; this represents 10 vacation days. The hours are calculated only when the period of leave is taken. If the worker does not take any leave, there will be no insurable hours.

@C.White, you are correct. I have come to that conclusion after having the following tought. 
 Say you input 0 in Hrs to vacation, then when the employee takes a planned 2 weeks vacation after a year: Would you say: 
 a) he will have no vacation pay because they were paid each week AND no paid vacation hours. The number of hours accumulated over a year for EI purpose, will be say 50w x 35h = 1750h 
 or 
 b) he will have no vacation pay because they were paid each week BUT his last stub before that planned vacation period will indicate 35hrs Regular hours paid PLUS 70 hours vacation paid @ 0 $, giving a total of 105 hours on the employee's stub for that last week. The number of hours accumulated for a year for EI purpose, will be (49w x 35h) + 105h = 1820h 
 To sort this out, I have c ompared, on the other hand, with a second employee who does not have vacation pay paid each week. W hen this second employee takes a planned 2 weeks vacation after a year, he will have a vacation pay of 2 weeks (4%) AND 70 in vacation paid hours box. His number of hours accumulated for a year for EI purpose, will be say (50w x 35h) + 70h vacation paid = 1820h. So b) must be the correct answer 
 Additionnaly, in this second employee case, say the last pay is made before the planned vacation period because the employee quits or the employer puts an end to his job, the 4% severence pay would have lead to 0 Insurable hours. 
 In conclusion, the box ''Vacation paid Hours '' should be filled only on the last pay before vacations. Although I find it convenient to input EI Hours each week, it would prove me wrong IF the employment ceased before the planned vacation time. 
 Thanks, C.White, for raising the flag again. 
 And now, let's remember to enter the total hours accumulated on the last pay before the vacation period. It will be accounted for if a Record of employment is issued afterward.

Sage 50 Canada

Do I enter the hours under vacation paid? if paying each pay period

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