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SRK's avatar
SRK
Trusted User
6 years ago

Annual Leave, Holiday Pay and Unpaid leave for three months...

Hi All   We have a long term employee going on three months leave.   He has some annual leave hours, some holiday pay and will take the balance as unpaid leave.   He has different hourly rates ...
  • jenniek's avatar
    jenniek
    6 years ago

    Hi SRK

    The only advantage spreading a mixture of paid an unpaid leave is the tax implications - there might be a slight reduction in tax if you didn't pay the full hours per week. As he is continuing to be an employee, he would still accrue annual leave while he is being paid, but if you process unpaid leave in full weeks, the divisor would be reduced calculate the annual leave rate over a lesser number of weeks.

SRK's avatar
SRK
Trusted User

Thanks Jenni - I was perhaps a bit misleading - the employee is taking a mix of paid and unpaid leave and coming back as an employee.   

 

I just wanted to clarify if spreading out the annual leave for almost three months (and mixing it with unpaid leave) has any advantage or disadvantage for the employer and the employee.  Otherwise I can pay the paid leave (and there will be two stat days) until that runs out and then unpaid leave until the return.

 

It is possible the employee will come back as a contractor as in some ways that may suit both parties better.  

jenniek's avatar
jenniek
Ultimate Partner
6 years ago

Hi SRK

The only advantage spreading a mixture of paid an unpaid leave is the tax implications - there might be a slight reduction in tax if you didn't pay the full hours per week. As he is continuing to be an employee, he would still accrue annual leave while he is being paid, but if you process unpaid leave in full weeks, the divisor would be reduced calculate the annual leave rate over a lesser number of weeks.

  • SRK's avatar
    SRK
    Trusted User
    6 years ago

    Thanks....I am happy to accommodate then.  I will think about the anniversary implications.  

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