A lot of companies are using daily proration to calculate annual leave entitlement for employees who are leaving the company.
As Personio currently calculates the end of employment accrual policy using the monthly proration calculation, here's what you can do to capture the daily proration entitlement for an employee leaving the company.
To make sure that proration will not be missed, we propose to add a manual adjustment with formula as an Onboarding Step which will be assigned to the respective personnel (e.g., HR).
First, we will need to create a step. Therefore, click on Settings > On/Off-boarding > Off-boarding Steps
Add a new step (type - Text Information) and name it, for example, “Manually Adjust Leaving Employee AL balance”.
In the text box enter the following information:
“Prorate the AL balance of the employee for the final month and manually adjust the overall AL balance.
Total AL entitlement / 12 (number of months in a year) x (n1/ n2) = X
n1 - number of days left in the month after the termination date
n2 - total number of days in the month
X - number of AL days to deduct of employees overall balance”
Manually adjust the balance by deducting the "X" number of days from the overall AL balance.
Information on how to manually adjust balances can be found here:
Once you have created the Off-boarding step, please assign it to the respective Off-boarding template, define responsible (e.g. HR), and define when this step will be launched (e.g. 10 days before the termination of an employee).
We’d love to hear your thoughts on this! And if you have already used this solution, how has it been working for you?
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