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Final Pay-

rockcrusher
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Cover User
New Zealand
rockcrusher
Cover User

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Final Pay-

Hi- all of our employees have a annual leave anniversary date of 01/04-regardless of when they were employed. This was set up for- maybe accounting convenience- well before I took over the payroll.

We have had an employee question the amount in their final pay- annual leave balance and holiday pay have been paid- automatically calculated by MYOB payroll.

The anomaly (or red herring) with this staff member is they have been on ACC since mid August- coming back to work for 2 hours per day for 2 months (normal hours 47.5- but often weekend work paid at time and half) Some longer hours done for a few weeks but his ACC payments have been his primary source of income.Should his "card" in MYOB have been adjusted to reflect the fact he was on ACC? so that his annual leave accrual was calculated differently.  I have done a few manual calculations based on his gross pay since he was employed less any annual leave already paid out-it appears we may "owe" him money- but not sure why MYOB wouldn't have calculated correctly. Is it to do with the anniversary date. Employee started 28/11/2016---  allocated annual leave less hours taken 1/04/2017- so final pay was balance of annual leave and HP on gross earned to date.

They have looked at the accrued leave hours on previous payslip and assumed this would be what they were to be paid out- I explained this didn't have any relevance to final pays-but don't want them not to be confident they have been paid what they are owed.

I also wasn't aware of the requirement to advise employees of the "universal annual leave anniversary date" when they are employed. Comments/explanation would be appreciated.

 

1 REPLY
MYOB Moderator Steven_M
23,538 Posts
MYOB Moderator
New Zealand
Steven_M
MYOB Moderator

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Re: Final Pay-

Hi @rockcrusher

 

Welcome to the MYOB Community Forum, I hope you find it a wealth of knowledge

Typically, when an employee is on ACC for more than a week you would process subsequent pays by placing the number of hours against the Unpaid leave pay code (UNPDLV) and placing a 1 in the Unpaid leave extra weeks (UNPLVEX) pay code. The reason for this is that it will reduce the divisor for the annual leave rate.  So, when doing a final pay it will factor that the employee has had additional extra leave and calculate slightly different.

 

Now in your case, it is slightly different as the employee has come back and worked for a number of days per week. So my advice would be to speak to the Department of Labour/Ministry of Business, Innovation & Employment and see where that falls in terms of leave calculations. As there are a few ways of looking at it:

  • When the employee has returned to work, what they were getting means that they were not ACC and thus the values paid do get included in the Annual leave rate calculation thus weeks don't need to be reduced

  • The total number of days the employee didn't work should be added together and calculated out in weekly amounts to determine the number of extra weeks the employee didn't work while on ACC. You would then be able to process those values through the UNPLVEX pay code.

  • The employee has actually changed the number of hours of week they have worked. As such in NZ Payroll you would be looking at New Zealand Payroll Support Note: Reducing an employee's Normal Hours per week

Kind Regards,
Steven
MYOB Client Support
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