How to cash in 1 weeks annual leave - NZ

mvmotors11
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How to cash in 1 weeks annual leave - NZ

I would like to check the correct way in NZ to cash in 1 weeks annual leave.  If you look up the help/support it tells me to create a new pay item but when I phoned I was told to choose "annual leave in advance". Choosing this option the PAYE is higher as taxed as an extra pay.

 

Would like to make sure I have done it correctly.

Thanks

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MYOB Moderator Steven_M
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Re: How to cash in 1 weeks annual leave - NZ

Hi @mvmotors11 

 

There are a few different ways in which you could process a situation where an employee cashes up one week of their annual leave. 

Our Help Article: Cashing out annual leave outlines the ideal process. However, in some cases, clients can use the Holiday being paid in advance which will make it extra tax code. Generally speaking, the Help Article process will use the employee's base tax code and tax they as part of the new PAYE calculations, whereas the Holiday being paid in advance option will allow the use of Secondary code/extra tax.

 

If you are unsure about what method best suits your requirements I would recommend speaking to the IRD to ensure that you have appropriate method for the PAYE.

Kind regards,
Steven

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