Vacation accrual

A vacation accrual is the recording and posting of vacation not taken. This is the case, for example, when the financial year has come to an end and the employee has not yet taken all their vacation days. A provision can also be created if there is still overtime in the working time account.

The amount of the provision must then be calculated.

Sense and purpose

As mentioned above, vacation accruals are used to record vacation days not taken. The employee then has the opportunity to take these days in the next financial year. If they do not take them, they can also make use of a payout. The aim of this is to ensure that the employee still realizes their rightful vacation entitlement.

This helps the employer to plan ahead. This gives him an overview of whether he will incur a financial expense or a future absence in the future.

How to calculate vacation accruals

If vacation is transferred, the vacation provision is formed.

For the calculation, the remaining vacation days are converted into working hours. This conversion is carried out according to the working time model.

The number of hours is valued at the employee’s gross hourly wage and the employer’s social security contributions etc. are then added to this. This type of calculation is also known as individual calculation.

However, there is also the option of calculating an average. In large companies in particular, individual calculation tends to be time-consuming and uneconomical, which is why average calculation is increasingly used here.

The employees are grouped together. The average hourly wages and working time models are used here. Although this type of calculation leads to inaccurate results or to under- or overvaluations, it is a permissible method.

Ultimately, the company itself may decide which of the two calculations it prefers.