What rate to pay annual leave in NZ

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What rate to pay annual leave in NZ

Hi! When an employee is using an individual annual holiday day during their week, how do you calculate the "value" of it.

With other leaves you use relevant daily pay (or average daily pay if RDP is not available) - but what system or calculation you use for annual leave days? When taking annual leave as weeks (the whole working week, days based on your agreement) it is easy, but does the RDP apply for individual annual holiday pay OR do I reflect the whole week and match it up with OWP (or AWP) ?  (person in question is not doing regular hours every day but roster varies / day and often does overtime)

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Re: Calculating individual annual holiday day

Hi @Mari2 

 

The amount paid for an Annual Leave in New Zealand is based on the Ordinary Weekly Pay or the Average Weekly Earnings, whichever one is higher.  If you select the Add Leave or holidays button>>Annual Leave when processing a pay in MYOB Essentials you will be able to see the calculation and also what values do go into that calculation.

 

Typically, if you have an employee that works varied hours you would use the Ordinary Weekly Pay formula which bases it on 4 weeks.

 

AL rate calculation.jpg

Kind regards,
Steven

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Re: Calculating individual annual holiday day

Hi and thank you for this. Yes, that part is simple. But how do I determine the hours? Do I just put hours as they were rostered on the day they want to be away on an annual holiday (so the shift they usually work on the day, not RDP... so no regular overtimes etc) OR do I look at what their OWP for the week would be, and divide that with the days they are to work (let's say they usually work 5 days / week) - so OWP / 5 = 1 day? Regardless of what the hours of the day they take as an annual holiday would have been and then see that their weekly pay from that week with the annual holiday day is at least their normal OWP?  OR does MYOB automatically calculate the cost for the day after I choose OWP and then how many days (=1 day)? So I don't have to pay attention to the hours as such ....

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Re: Calculating individual annual holiday day

Hi @Mari2 

 

If you are unsure what exactly you should be using to calculate any part of the annual leave entitlement calculations including hours I would recommend reaching out to the Employment NZ for guidance on that.

 

From an MYOB Essentials Payroll point of view, the system will use the contracted hours i.e. the hours entered into the Hours per week field on the employee record as the basis of the annual leave calculations. However, should you need to change it you can click into the hours per week field on the Annual Leave Calculation window to update that information for that pay.

 

In terms of actually the hours they are taking leave, this can be entered on the Pay employee window by the user. Typically, you would enter the number of hours the employee has taken leave but for guidance on that Employment NZ would be the best to get specific information on that.

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Steven

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Re: Calculating individual annual holiday day

Hi Steven

Thank you so much for the reply and advise, much appreciated. I'll contact Employment NZ to check those hour calculations and will also look into those annual holiday calculations (hours per week).

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