How to Process Monetized Leave in Sprout Payroll

Amounts of vacation leave allowances or sick leave credits which are to be paid to an employee constitute compensation. However, the monetized value of unused vacation leave credits of ten (10) days or less  which were paid to the employee  during the year are not subject to withholding tax. 

 

Once you have already generated unused leave due for leave conversion, you may now proceed with payroll crediting.

Here's related link>> How to Generate Leave Credits

 

If you opt to include the monetized leave in normal payroll, you may use the One-time Adjustment template and manually add the leave conversion. You may also want to separate the payroll for the leave conversion using Adjustment Payroll Type.

 

Here's a simple way to use the Adjustment type of payroll:

 

1. Go to Payroll Run, and click Create Payroll

 

2. Fill out necessary details, select Adjustments then SAVE

 

Non Tax Monetized leave (Part of 10 leave credits): Should be tagged as Deminimis Benefit, Deminimis Adjustment or Deminimis Allowance
Taxable Monetized leave (Excess of 10 leave credits): Should be "Taxable Monetized leave"

 

3. Click Upload Adjustments

 

4. Download Excel Template

 

5. Fill-out necessary details, then SAVE

 

6. Once done, Import the updated file

 

 

 

7. Click Next