Comprehensive Configuration Guide: Vacation Pay Per Pay (Canada)

This guide walks you through setting up Vacation Pay Per Pay—a feature that automatically calculates and pays out vacation pay as a percentage of eligible earnings on every paycheque, rather than accruing leave hours.

Pre-Implementation Checklist: Scope Your Required Steps

Before starting, determine which path applies to your organization:

Step 1: Configure the Vacation Pay Policy

(One-Time Administrative Setup)

The default non-accrual policy will be used to assign vacation pay rates to employees who receive vacation pay with each paycheque rather than accruing vacation hours.
You can rename this policy for easier identification or keep its existing name. Make note of the policy name, as you will need it when assigning vacation pay rates in the next step.

1. Navigate to Payroll > Leave Management > Leave Accrual Rates.

2. Locate the default policy titled None AL  (None AL).

3. Click Edit.

4. Change the Policy Name field to Vacation Per Pay or another descriptive name.

5. Click Save.

Checkmark: Verify that Vacation Per Pay now appears in your active list of Leave Accrual Rates.

Step 2: Configure Vacation Pay Percentages

(One-Time Administrative Setup)

Define the percentage payout based on employee years of service (seniority) to comply with provincial or organizational standards.

Creating Your First Threshold

1. In the global navigation search bar, search for CA Vacation Pay Thresholds.

2. Select New CA Vacation Threshold.

3. Fill out the threshold fields:

   • Name: Enter a clear identifier (e.g., Two Weeks – Under Five Years).

   • Entitlement: Select Vacation Per Pay (the policy updated in Step 1).

   • Seniority Range: Enter the starting and ending years of service for this tier (e.g., 0 to 5 years).

   • Vacation Pay Percentage: Enter the rate corresponding to this tier (e.g., 4%).

4. Click Save.

Configuring Additional Tiers

Repeat the steps above for all remaining seniority tiers offered by your company.

• Example Configuration Structure:

  • Tier 1: Under 5 years of service → 4%

  • Tier 2: 5 years to under 10 years of service → 6%

  • Tier 3: 10+ years of service → 8%

Important Validation Rules:

• Check for Gaps or Overlaps: Ensure range boundaries transition cleanly (e.g., Tier 1 ends where Tier 2 begins) so no employee falls into an unconfigured gap or double threshold.

Step 3: Remove Existing Vacation Pay Loading

(Critical Step — Existing Customers Only)

If your organization currently calculates vacation pay via a loading percentage attached to standard pay components, you must clear this loading completely before continuing.

Warning: Failing to perform this step will cause the system to process both the old loading percentage and the new Vacation Pay Per Pay calculation simultaneously, resulting in duplicate payouts to employees.

Verification and Removal Steps

1. Audit your current setup under Payroll Subtypes / Pay Components.

2. Identify all Salary or Wage pay component subtypes that contain an active vacation loading percentage.

3. Remove/zero-out the loading percentage on each affected subtype.

    

Checkmark: Confirm that all Salary and Wage subtypes reflect a 0% or empty loading field before moving to Step 4.

Step 4: Assign Vacation Pay Per Pay to Employees

(Employee-Level Setup)

Once policies, thresholds, and clean component subtypes are established, assign the feature to eligible employees.

Option A: Individual Employee Update

For each applicable employee record:

1. Search for and open the Employee Record in Edit mode.

2. Locate the Leave / Payroll Settings tab.

3. Assign the Vacation Per Pay leave policy.

4. Set the Vacation Pay Type dropdown field to Vacation Per Pay.

5. Click Save.

Option B: Bulk / Mass Update

Watch: How to Assign Vacation Pay Per Period Using Mass Updates

Use NetSuite's Mass Updates feature to assign Vacation Pay Per Period to multiple employees simultaneously.

1. Navigate to Mass Updates

• Go to Payroll Administration > Payroll Setup > Mass Updates.

• Under Actions, select General Updates.

• Under General Updates, select Employee.

2. Define Your Employee Criteria

• Under the Criteria subtab, apply filters to isolate the employees who require updating.

• Example: Filter by Pay Type (e.g., Wages) or Pay Frequency to narrow down your employee selection cleanly.

3. Configure the Results Column Layout

• Under the Results subtab:

  • Remove any unnecessary default fields.

  • Retain Employee Name.

  • Add Pay Type or another relevant field to help verify target employees easily.

4. Configure the Update Fields

• Under the Mass Update Fields subtab:

  • Locate the Vacation Pay Type field.

  • Select Vacation Pay Per Period from the dropdown menu.

  • Click Preview.

5. Review and Apply the Update

• The preview list displays all employees who meet your criteria.

  • Review the list to confirm accuracy.

  • Use the Apply checkbox column on the left to include or exclude individual employees as needed.

  • Once verified, click Perform Update to execute the changes.

Post-Implementation Verification

• [ ] Policy Check: Is Vacation Per Pay active in Leave Accrual Rates?

• [ ] Threshold Check: Are all seniority tiers covered with zero gaps or overlapping years?

• [ ] Loading Audit: Is all legacy pay component loading completely cleared (Step 3)?

• [ ] Assignment Check: Are active employees assigned both the Vacation Per Pay policy and Vacation Per Pay pay type?

• [ ] Ongoing Maintenance: Note that future new hires only require Step 4 during onboarding.

Need Additional Assistance?

• Configuration Help: Contact standard Support for troubleshooting specific settings.

• Hands-on Migration Support: Create a support case to request assistance from our Professional Services for direct transition management (available on a billable basis).