Available for Basic Payroll, Full Service Payroll
Use company time-off accrual rules to automatically add paid time off hours to employee balances when you run payroll. For example, you can set up a rule so employees earn one hour of paid leave for every 40 hours worked.
After you create a company-level accrual rule, you can assign it to employees. Employees begin accruing time off when they are paid through payroll.
The video walks you through using time off accruals.
Before you set up a time-off accrual rule
Before creating a company-level time-off accrual rule, review your paid leave policy and confirm whether any city or state paid leave laws apply to your business.
You are responsible for setting up required paid leave accrual rules for your company. Paid leave laws can include rules for accrual rates, annual limits, carryover, and usage. For more information, see Patriot’s paid sick leave laws by state resource.
You can also manually give employees a lump sum of time off hours, also called frontloading. Frontloaded hours do not use an accrual rule and must be manually reset each year. To manually adjust an employee’s balance, see Editing an Employee’s Time-Off Balance.
Step 1: Set up a time-off Hour Type
An Hour Type is the category Patriot uses to track hours, such as Vacation, Sick, or PTO. Before you create an accrual rule, you need at least one Hour Type set up for time off.
To set up or review a time-off Hour Type:
Go to Settings > Payroll Settings > Hours and Money Types.
Click the name of the hour type you want to use for time off, such as PTO, Vacation, or Sick.
Or, add a new hour type.
Leave the rate multiplier at 1 for paid time off.
For Is this a non-worked hour?, select Yes.
For Do you want to include in Manage Time Off?, select Yes.
Click Save.
You can create more than one time-off accrual rule for the same Hour Type if your company has different policies for different employees.
Step 2: Decide which hours should count toward accrual
Before creating the rule, decide which hours should be used to calculate accrued time off.
For example, your policy may allow employees to accrue paid leave based on:
Worked hours only
All paid hours, including paid leave hours
A specific combination of hour types
Example: Your company policy may allow employees to earn one vacation hour for every 40 worked hours. In that case, you may not want vacation, holiday, or sick hours to count toward the accrual formula.
How do I create a company-level time-off accrual rule?
After you set up at least one time-off Hour Type, you can create the accrual rule.
To create a company-level time-off accrual rule:
Go to Settings > Payroll Settings > Time Off Accruals.
You can also go to Payroll > Payroll Tasks > Manage Time Off > Time Off Accruals.
Click Add New Rule.
In Title, enter a unique name for the rule.
The title can be up to 50 characters.
In Formula, enter how many paid leave hours employees earn for each hour paid or worked.
Select the hour types that should count toward this rule.
Choose a Calendar Year Accrual Limit.
Choose Carryover Rules.
Choose a Maximum Accrual Limit.
Assign the accrual rule to active employees by checking the box next to each employee’s name.
Click Save.
What is a Calendar Year Accrual Limit?
A Calendar Year Accrual Limit controls how many hours an employee can accrue during a calendar year.
You can choose:
No Limit: Employees continue accruing hours, unless they reach a maximum accrual limit.
Set Calendar Year Limit: Employees stop accruing hours once they reach the calendar year limit.
If an employee reaches the calendar year accrual limit, Patriot stops adding hours for that year. If the employee uses leave and their balance goes below the limit, no additional hours accrue until the limit starts again on January 1.
What are Carryover Rules?
Carryover Rules control what happens to unused time off at the end of the calendar year. You can choose:
1. No Carryover
Select No Carryover if employees cannot carry unused hours into the next calendar year.
With no carryover, all available hours expire after December 31. On January 1, Patriot automatically deducts any remaining hours. In the employee’s Manage Time Off activity, the action description shows End of Year Reconciliation.
2. Allow Carryover
Select Allow Carryover if employees can carry unused time off into the next calendar year.
If you allow carryover, you can also limit how many hours employees can carry over.
To limit carryover hours:
Check Limit Carryover Hours.
Enter the maximum number of hours employees can carry over.
If you leave the maximum carryover hours blank, employees can carry over an unlimited number of unused hours.
2.a Carryover Expiration
If carried-over hours should expire on a certain date in the following year, enter the month and day.
On January 1 of the following year, Patriot automatically brings each employee’s balance to zero. Then, Patriot adds the allowed carryover amount into the next year.
In the employee’s Manage Time Off activity, you’ll see:
End of Year Reconciliation to reduce the balance to zero
Carryover to add the carried-over hours to the available balance
What is a Maximum Accrual Limit?
A Maximum Accrual Limit controls the total number of hours an employee can have accrued at any time. This limit can extend beyond one calendar year.
You can choose:
No Maximum Limit: Employees continue accruing paid leave hours, subject to any calendar year accrual limits.
Set Maximum Limit: Employees stop accruing hours once they reach the maximum limit.
Example: An employee has a maximum accrual limit of 80 hours. Once the employee reaches 80 accrued hours, they stop earning more time off. If the employee uses 8 hours, their balance drops to 72 hours. The employee can begin accruing again until the balance reaches 80 hours.
How do employees accrue time off?
Employees accrue time off when you pay them through payroll. The hours entered for each employee in Payroll Step 1 determine how many time-off hours accrue, based on the rule formula.
For salaried employees assigned to a time-off accrual rule, you must enter the actual number of hours in Payroll Step 1 for time off to accrue.
These entered hours do not affect the employee’s salary rate. Patriot uses the hours only to calculate accrued time off.
Where can I see accrued time off?
Accrued hours appear on the employee’s Manage Time Off page.
To run the Hour Balances report:
Go to Payroll > Payroll Tasks > Manage Time Off > Hour Balances.
Select the Hour Type that earns accrued time off.
Select the date range.
Click Run Report.
Review the employee list for:
Starting hours
Hours added
Hours taken
Available hours
Click the employee’s name to see accrual details.
The date the hours are added is the end date of the pay period for that paycheck. Accrued hours appear in the Hours Added column. The comments show Accrued From Payroll, and the source shows Accrued.
If you void a paycheck that included accrued time-off hours, Patriot reverses the accrual along with the rest of the paycheck. The employee’s Manage Time Off details show the source as Payroll Void Accrued.
Where else do accrued hours appear?
Accrued time-off hours also appear in:
Payroll Step 2, under View Details
The employee pay stub
The Payroll Register report
The Time Off History report in the employee portal
How do I edit a company time-off accrual rule?
If an accrual rule has been assigned to an employee and used to calculate time off in payroll, you cannot edit the rule title.
If you need to change the formula or hour types, inactivate the rule and add a new rule.
To edit limits on an existing rule:
Go to the time-off accrual rule you want to change.
Click Edit.
Change or set the maximum accrual limit or calendar year accrual limit.
Click Save.