Does paying holiday pay in advance corrupt the program.

CuriousCroppers
1 Post
User
New Zealand

Does paying holiday pay in advance corrupt the program.

Hi everyone, our holiday pay calculations don't seem to make any sense, and we wonder if we have messed something up. 

 

Our workers are usually desperate for extra money and so we pay out holidays in advance of their anniversary date. 

 

Typically, they will get up to minus 100 hours near to anniversary . 

 

As an example, Employee R, on the week before his anniversary, would have been paid out $20 plus his pay if we had done a final pay on that date. 

 

However, on the next week's pay, after the anniversary if we do a final pay, he is owed $1000, plus the amount he is owed for the work he had done. 

 

He normally earns $1000 per week. (recieves about $750 after deductions) . Why is the final pay calculation  on week one after the anniversary, not $20 plus 8% of $1000 ? 

 

Additional information : He normally works about 45 hours per week. 

1 REPLY
Ultimate Partner jenniek
2,105 Posts
Ultimate Partner
New Zealand

Re: Does paying holiday pay in advance corrupt the program.

Hi @CuriousCroppers

Are you using Essentials Payroll or NZ Payroll? Are you paying out the leave in advance as annual leave or hol pay? You should pay out ANHL - annual leave, but the HP Hol Pay still accrues. At the anniversay date the Hol Pay is turned into annual leave at the average rate of the previous 12 months. This rate could be higher than the ord rate of pay. the negative annual leave then gets made a postive with whats left of the entitlement and the HP goes back to Nil to start again for the new year. If you do a final pay, the ANHL should get taken off the full 8% owing - so if your system says it is still owing, then it likely there is something wrong with the setup.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
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