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Holiday pay being paid in advance

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Contributing User
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Contributing User
Contributing User




Holiday pay being paid in advance

If an employee is taking Annual leave, however is not yet entitled to Annual Leave yet, should the 'Holiday being paid in advance (this is taxed as 'Extra pay')' box be ticked in Essentials?

Example: employee R works full time, but has not worked for the business for a full year yet. Employee R has accrued annual leave, however has 0.00hrs of annual leave currently available. If employee R is wanting to take annual leave prior to estimated annual leave accrued rolling over to annual leave entitlement, should annual leave processed before annual leave entitlement have Holiday being paid in advance (this is taxed as 'Extra pay') ticked?


3,372 Posts
Former Staff
Former Staff




Re: Holiday pay being paid in advance

Hi @Ebony2020,


Thanks for reaching out. 


As each business can be different, you'd want to reach out to your financial advisor or Employment NZ regarding the employee being entitled to paid leave in advance, as well as the tax implications regarding the 'Extra pay' option if you are unsure. 


Once you've confirmed the above, you would proceed to pay the leave during a pay run.  See the help article Paying leave for more details. If you need to verify you have set up leave correctly see Set Up Leave. Once annual leave is included as a payroll option on the screen you can enter in the amount. It will still record even if their leave balance is negative.  


If you have any further queires, please reach out. 


If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Kind regards,

MYOB Community Support

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