Forum Discussion

Leah_ChCh's avatar
Leah_ChCh
5 years ago

MYOB Payroll - reduction in payrate

Hi all, An employee has been asked to permanently take a 20% reduction in pay but is concerned that the 30 annual leave days owing at this stage will start to reduce in rates to reflect the deductio...
Payroll
  • jenniek's avatar
    jenniek
    5 years ago

    Hi Leah_ChCh 

    Your employee is correct. While his leave entitlement will stay the same - the average of the last 52 weeks pay will decrease over time - so his existing $40.00/hr will come down as time goes on. This is because annual leave is calculated at the average of the last 52 weeks gross earnings - when he takes annual leave - so it is a roving figure which changes every week. It will take a year to decrease fully - assuming he doesn't earn any overtime, bonues etc that may affect gross earnings.

jenniek's avatar
jenniek
Ultimate Partner
5 years ago

Hi Leah_ChCh 

Your employee is correct. While his leave entitlement will stay the same - the average of the last 52 weeks pay will decrease over time - so his existing $40.00/hr will come down as time goes on. This is because annual leave is calculated at the average of the last 52 weeks gross earnings - when he takes annual leave - so it is a roving figure which changes every week. It will take a year to decrease fully - assuming he doesn't earn any overtime, bonues etc that may affect gross earnings.

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