What the setting is used for
The 'Reduce by Leave Taken' setting ensures that when you add leave or public holiday worked entries for your employees their ordinary payment (wages or salary) are automatically reduced by the appropriate amount.
It is found in the payment settings. It should be enabled for employees who have been set up with a regular payment, such as a fixed number of hours for an hourly rate or a salary.
It does not need to be enabled for employees who have variable hours or timesheet their time, and as such are getting an actual number of hours worked recorded every pay.
Examples
Sally is set up on standard hours of 40 hours per week, paid at $30 per hour. Every pay time her hours are automatically populated in the pay run as 40 hours.
Sally needs the 'reduce by leave taken' setting on so that if she takes 8 hours of leave, her standard hours are automatically reduced to 32.
James is set up to timesheet his hours every pay and his hours are different every pay time. He doesn't have standard hours that appear every pay. James does not need the 'reduce by leave taken' setting turned on, because if there is a day of leave he will not be submitting any timesheet hours for that day. His hours and any leave requests are added together to make the correct value to pay.
How it works
The following employee types should all have the 'reduce by leave taken' setting enabled for their main payment.
Salaried
Salary with timesheet
Salary with Top Up
Standard hours waged
Standard hours with timesheet
The following employee types generally should not have the 'reduce by leave taken' setting turned on:
Casual employees
Employees with no standard hours loaded in their settings or payment
⚠️ In certain cases a non standard hours employee may need to have the ‘reduce by leave taken’ setting turned on, e.g. If an employee working non standard hours happens to work on a public holiday and records this worked time on their timesheets, there will be a prompt in the Leave View area to activate the ‘reduce by...' button for that employee.
In the graphic above the system is asking the payroll administrator to “Click here to turn this setting on”. This allows the timesheet hours to be paid at the Public Holiday Worked rate (1.5), but still display the hours worked on the timesheet.
When leave (of any type) or a 'public holiday worked' is applied, the Reduce by Leave Taken setting will automatically reduce the standard hours/pay by the same amount that has been added as leave.
Leave reduction error
If you do not have the 'reduce by leave taken' setting on, you may encounter an error message explaining that the employee may be overpaid.
How to turn 'Reduce by Leave Taken' on
Go to the Employees section, click on your employee's name and then select the Payments tab.
Click on the name of the employees main (primary) payment.
Check on the box that says 'reduce by leave taken'.
Click Ok.
Checking that the reduction is applied
In any pay where an employee has a leave entry or a public holiday worked entry, you should see a downward arrow next to their main payment line. Hovering over this arrow will explain that the payment is being reduced and tell you the number of hours it was reduced by.
If you think the reduction hours are not correct, check the employee's work pattern (also found in their payment settings).
Reduction settings for public holidays worked
When your employee works on a public holiday, PaySauce will recognise the entry for public holiday worked and apply the reduction rule to ensure they don't get paid for both their normal hours and the time and a half hours for working on a public holiday.
There is a company setting that defines which rule to apply to reductions for public holidays worked.
You can select either:
Hours worked: will reduce by the number of hours you recorded as worked on the public holiday.
Work pattern hours: will reduce the employee's hours by the number of hours specified in their work pattern (i.e. will reduce by a full day).
To review or change this setting:
Go to your company settings by clicking on your company name in the top left hand corner of your screen.
Click on the Settings tab then select 'general' from the menu.
Scroll to the bottom to the 'reduce primary hours rule'.
The reason that PaySauce offers two options here is because we know that employers apply different rules and have different preferences.
By default, if an employee works for a small number of hours on a public holiday, there's no requirement to 'top up' using normal hours for the rest of the day. However, we know that most of our employers still want to ensure that their employee gets paid for the balance of the day if they only worked a small number of hours on a public holiday.
You can choose the most appropriate setting for your business and preferences.