Percentage per pay is a transactional accrual method where leave accrues each pay period based on the total hours recorded against selected paycodes. This method is used in jurisdictions or employment agreements that require leave to accrue proportionally to the actual time worked.
This article explains:
How percentage per pay works
How to calculate an accurate accrual percentage
How the calculation operates inside SmoothPay
How to configure a percentage per pay leave code
How to link paycodes to ensure correct accruals
How Percentage per Pay Works
Unlike anniversary or to-date methods, percentage per pay:
Does not use anniversary dates
Does not use pro-rated accrual
Does not calculate any to-date portion
Builds the balance solely from recorded transactions
The system adds a positive transaction each pay based on total linked hours, and the balance increases cumulatively.
Percentage per pay is ideal when:
Employees accrue leave in direct proportion to time worked
Employment agreements specify percentage accrual
Jurisdiction rules require it
Calculating the Accrual Percentage
To configure percentage per pay correctly, you must determine an accurate annual percentage.
The percentage is calculated as:
Leave earned per year ÷ Total working units per year
This ensures the system accrues the exact entitlement over the course of a full working year.
Examples
Unit type | Example | Calculation | Result |
Hours | 160 hours leave per year ÷ 2080 working hours | 160 ÷ 2080 | 7.69 percent |
Days | 20 days leave per year ÷ 260 working days | 20 ÷ 260 | 7.69 percent |
Weeks | 4 weeks leave per year ÷ 52 working weeks | 4 ÷ 52 | 7.69 percent |
The percentage remains identical regardless of the unit type. It represents one thirteenth of a working year.
It's best to use as many decimal places as possible to get an accurate calculation
How the Calculation Works Inside SmoothPay
Percentage per pay accrual requires paycodes to be linked to the leave code. These linked paycodes define which hours contribute to the accrual.
The formula used by SmoothPay is:
Total linked hours × Accrual rate = Leave accrued
Example Calculation
If the leave type is configured with:
Accrual rate: 7.692038 percent
Linked paycodes: ordinary time and paid leave codes
And the employee works:
20 hours ordinary time
20 hours annual leave
Total linked hours = 40
Accrual:
40 × 0.07692038 = 3.077 hours
SmoothPay will record a 3.077 hour accrual transaction for that pay period.
Setting Up Percentage per Pay Leave Accrual
Before setup:
Calculate the correct accrual rate
Identify which paycodes the accrual must operate on
To create or configure a percentage per pay leave code:
Go to the Codes screen
Select the Leave codes category
Select an existing leave type or click the + button to create a new one
Click the edit button (if editing)
Set the Use or accrue field to Percentage per pay
Set the Accrual rate field to the calculated percentage
Use the Calculate percent on section to configure which paycodes drive the accrual
Click Save
Linking Paycodes to the Accrual
The Calculate percent on section allows you to link which paycodes contribute to the percentage calculation.
This section appears only for percentage per pay leave codes.
Available options
All: All paycodes contribute
Taxable: Only taxable paycodes contribute
Superable: Only superable paycodes contribute
Toggle: Invert the current selection
Additionally, you can manually select or deselect individual paycodes from the list to the right.
Choosing the correct approach
Use the option that matches:
Your jurisdiction’s compliance requirements
Your organisation’s leave policies
The employment agreement terms
The most common setup is to only include paycodes that create the employee's ordinary working week. Normally everything apart from:
LWOP
Overtime
Best Practice
Ensure the accrual rate is calculated accurately before setup
Review linked paycodes, especially after adding new paycodes
Confirm the balance behaviour through the Leave → History tab
Use percentage per pay only where appropriate for legislation or agreement