Annual leave rate increases

[Gail206E]

Why does the annual leave rate alter with certain staff AND sometimes I am able to change it back to their ordinary rate and sometimes not?

Also, we have a staff who started October 2019, has taken leave in advance.  He is on a salary so his monthly payment should not change but it does, as his annual leave rate has increased and I am unable to change it.  

thanks, Gail

[Steven_M]

Hi @Gail206E 

Within New Zealand, Annual Leave rates are not based on the employee's pay rate but the average weekly earnings or ordinary weekly pay whichever one is higher. As such, if the employee is paid extra in a pay or they have an additional value this tends to increase the average weekly earnings and thus their annual leave would get paid out a higher rate.

With MYOB Payroll (Desktop), you can the calculation and what values are being included with those calculations through the Leave button in the Enter Pays window. Alternatively, via the ellipsis button in the Leave Details window.

NZ Payroll Support Note:  Annual leave rate calculation has more information on that topic. 

[Gail206E]

thank you I do understand that -

My real question is :  why does MYOB allow me to alter the annual leave rate sometimes for some people and sometimes it is greyed out so cannot change back to hourly rate.  And should the annual leave rate alter for someone on a salary?

[jenniek]

Hi @Gail206E 

What Payroll programme are you using?

The annual leave rate for someone on a salary would alter if they got a bonus (which was part of gross earnings) or any other payments which were included in gross earnings.

[Gail206E]

MYOB payroll.  Ok ta for answer. 

Is a salaried person entitled to the 8% holiday pay?  Does it matter if they have been loaded on "ordinary time" as opposed to using the "salary" coding?

And why can I alter annual leave rate on some staff and not others - what changes in the programme to "suddenly" block changes to a field?

thanks

Gail

[Steven_M]

Hi @Gail206E 

Technically all employees are entitled to holiday pay (the 8% of their gross earnings). Typically, you would only pay this out to a salaried employee when you do their final pay, which would be calculated as 8% of their gross earnings since their last anniversary date.

Provided that you have enabled Allow rate to be modified when entering pay details in the Maintain Pay Codes for that pay code you should be adjusted the pay rate for all employees.

[Gail206E]

THANK YOU Steven.  That last paragraph is key for me. 

Although I would like to clarify - does it make any difference if a salaried person (with set 4 weeks holiday)  is entered in payroll as on "ordinary time" instead of using the salary field?  He is currently loaded as "ordinary time".  any problems if I were to introduce the "salary" field and use that from now on?

many thanks

Gail

[Steven_M · Accepted solution]

Hi @Gail206E 

I'm personally not aware of any differences between using ORD or SAL to pay your employees. The only thing would be you would need to create overtime pay codes (like ORD1.5 or ORD2) if you are needing to make payment at a higher rate. 

Although, if you are moving from ORD to SAL, I would do it at the start of the next payroll year. This is mainly for consistencies sake i.e. you have done almost a full year at ORD you might as well continue that process for another 6 weeks or so then draw a line in the sand for the next payroll year. 

[Gail206E]

thanks for that.  Much appreciated.