Kiwi business, especially those involved in contracting and service industries often close for annual holidays just prior to Christmas and re-open in the New Year. Many businesses encourage their Staff to take leave over the festive season 'when things are quiet'. Staff employment agreements will include provision for staff to take at least part of their annual leave during this close down period. The calculation of holiday pay is an integral part of employees' final pay for the calendar year.
Employees are entitled to receive their pay for annual leave before they commence their leave. This provision provides an employee with money to pay for travel & accommodation.
The employer and employee can agree to leave the normal pay cycle undisturbed by the time off work. If so, it's recommended that the employees' employment agreements reflect this.
Whichever of the following is the larger becomes the rate of the weekly holiday pay:
Calculating pay for statutory (public) holidays
In the case of employees who have commenced employment during the year, their average weekly earnings are calculated by taking the amount of their gross earnings from starting work until the last pay period before the holiday and dividing that amount by the number of weeks worked. For examples on holiday pay please visit the Ministry of Business, Innovation and Employment website: http://www.dol.govt.nz/
Pay calculations can be complex especially when employees receive allowances, (e.g. travel) and can have deductions made (e.g. KiwiSaver, student loan) so contact us if you need assistance in getting these important calculations right.
Date: December, 2013