On the Leave Details tab in the Employee setup you have a number of fields that control how much sick leave an employee has available and how much they accrue each anniversary.
By default the system allocates 5 days to an employee. They get this allocation after 6 months in employment and then each year after that. You can change the annual sick leave entitlement if you want.
The sick leave fields in the Leave Details tab are shown in hours and days. The figures in days are those used to meet legislative sick leave requirements. Some companies with employees working very irregular hours may like to track the leave balances in hours also.
If you are using time sheets you can specify that the employee has taken sick leave by selecting the work Employee Leave and the work category Sick Leave, the number of hours you enter will then be included in the pay for the employee and once the pay is finalised their sick leave balance will be reduced by one day.
If you're not using time sheets you can enter a pay line manually into the employees pay for the pay code SICK. When you do this you need to specify the number of hours they will be paid and the number of days to reduce their balance by.
That's how the system works. However, you may be wondering how many hours makes up a day if an employee takes a day off as sick leave. This would be the normal hours the employee would work on that day. If this is variable then you can use the average hours per day. For employees who do not have Hours per Day set on their Employment Details tab there is a Use Average Daily Pay button that (if you use timesheets) will default the hours per day and the average pay rate based on the last 12 months of employment.