Forum Discussion

Tenua's avatar
11 months ago

8% Gross Amount incorrect for Termination Pay

I have sent this email to support but was wondering if others had the same issue....... I am running both MYOB Business Payroll while still running ACE Payroll. I have done a final/termination pay for an employee and the pays are drastically different. (About $360 different on a $450 pay). The difference in calculations is due to the 8% gross calculation. The finishing employee has taken 18.555 days in advance and is finishing just prior to his 2nd anniversary. In ACE the gross calculation EXCLUDES payment for days already taken and paid, but in MYOB Business the gross calculation INCLUDES holiday pay already paid in advance. (So this would result in paying 8% holiday pay on to holiday pay already paid). On the Employment New Zealand website they state........ "Pay 8% of the employees‘ total gross earnings since their annual holidays anniversary date (LESS any amount paid for taking any of this year’s annual holidays in advance or paid on a pay-as you-go basis)".... On this basis, the gross amount in the "Quantity" column in MYOB Business is incorrect. Has anyone else found this?

  • Hi Tenua,

     

    Thank you for your post, and my apologies for the late response.

     

    In MYOB business, when an employee's holiday leave is paid in advance, the total amount paid will be subtracted from the total holiday pay of 8% (final pay). If the employee's anniversary date happens to fall within their final pay period, the holiday pay calculations might lead to an overpayment. This is because the “gross earnings this pay run” will include the entire pay run, not just the gross earnings earned from the anniversary date onwards. For a more detailed information, please refer to our Help article: Preparing a Final Pay in New Zealand.

     

    Please let us know if you need any further assistance.

     

    Cheers,

    Princess

    • Tenua's avatar
      Tenua

      As previously stated the employee finished just prior to his 2nd anniversary, so his anniversary date didn't fall within their final pay period.  ACE calculated his gross excluding payment for days already taken and paid (which is correct), but MYOB Business calculated the gross INCLUDING his holiday pay already paid in advance (resulting in paying 8% holiday pay on to holiday pay already paid during the year). Had I not been running ACE Payroll side by side to MYOB Business I wouldn't have picked up the error and the termination pay would have been drastically overpaid.     

      • Princess_R's avatar
        Princess_R
        MYOB Moderator

        Hi Tenua,

         

        Thank you for your response.

         

        When processing a final pay in MYOB business, it's important to ensure that all the necessary steps in Processing a final pay are followed correctly. Could you kindly verify whether the leave that was paid in advance has been inputted during the final pay process? This will help us better understand the issue.

         

        Cheers,

        Princess