Restricted Annual Leave (In Weeks)

Please see the main article here: https://crystalpayroll.freshdesk.com/en/support/solutions/articles/51000461992-annual-leave-settings-in-depth-overview

Restricted Annual Leave (In Weeks)

This guide explains how to calculate your employees’ leave in weeks using Crystal Payroll and how to manage it moving forward.

The primary reason for using this method is to ensure your business complies with the Holidays Act 2003.

This feature ensures that employees are always entitled to four weeks of annual leave based on their contracted "genuine working week".

For example, if an employee works 20 hours per week for 12 months, they will be entitled to 80 hours of leave. If their hours later change to 40 per week, their entitlement updates to 160 hours.

This method—commonly known as "Annual Leave in Weeks"—is considered the most compliant way to manage leave, as it ensures employees always receive four weeks based on their current work schedule.

How to Set It Up

Go to "Company Settings", "Payroll Settings", "Leave Settings".

Tick the box labelled Update Leave Entitlement Based on New Default Hours.

Do note that: You must ensure that all employees have the next option set up correctly.

Navigate to "Employee Settings", "Employee Details".

Under Other Details, click Default Entitlement.

Ensure Show Entitlement as is set to Weeks.

Enter the number of hours that make up a week (either their default or average hours).

An Example of How It Works

This function allows you to enter an employee’s new default hours, and the system will automatically update existing entitlements so they still represent the correct balance, just calculated at the new hours.

For example, if an employee initially worked 40 hours per week and earned 4 weeks’ leave, and their hours later drop to 20, the system will automatically apply a Special Adjustment so the balance still reflects 4 weeks, but based on 20 hours.

Here is the function in action:

Go to "Employee Settings", "Employee Details", "Default Hours".

The green box shows the new Default Hours entered by the user. The red box shows the original Default Hours of 40.

The green box above was automatically entered to reflect the new Default Hours. This ensures the employee still has 4 weeks’ leave, now based on 20 hours. The red box shows the original entitlement based on 40 hours.

Payslips and reports will also reflect the updated hours and balances at the time the changes are made.

Here is a sample payslip before the default hours were changed:

And here is the payslip from the following week after the default hours were changed. As you can see, the accrued balance has been correctly adjusted for the change from 40 to 20 hours.