Are you dreading your staff complaining about their holiday pay? Here are some ways to avoid the pitfalls. Holiday Pay can cause a lot of stress and so learning some simple rules can help smooth the way to better employee relations.
For example; Annual Leave holiday pay is treated differently from Public Holiday pay and so you cannot assume that paying the normal weekly or daily amount will be correct. The way this must be calculated is that the average weekly rate over the previous 12 months, or the regular weekly rate can be paid - whichever is the higher.
Here are some simple tips to keep in mind:
Here is an excerpt from an excellent article by Jess Logan:
"The purpose of the Holidays Act is to promote a balance between work and employees’ personal lives and provide employees with minimum entitlements to:
Annual holidays to provide the opportunity for rest and recreation
Public holidays for the observance of days of national, religious, or cultural significance
Sick leave to assist employees who are unable to attend work because they’re sick or injured, or because someone who depends on the employee for care is sick or injured
Bereavement leave to assist employees who are unable to attend work because they have suffered a bereavement
to read more go to -https://www.myob.com/nz/blog/holiday-pay-why-do-businesses-get-it-wrong/
90% of the calls we get regarding payroll relate to holiday pay. Good record keeping, utilizing a payroll software program, and being up to date with current legislation goes a long way towards having a stress free payroll.
Xmas is coming yet again. But before we can swap the keyboard with a glass of wine many of us need to prepare holiday pays for the shut-down. Yes, it’s a headache but one which can be mitigated if you take the time now to plan it.
Whether you use MYOB Payroll, ACE Payroll, IMS Payroll, EXO Payroll or Essentials payroll the legislation surrounding HP is the same. And you must comply.
Our tips for processing pays over the shutdown:
Employees working on a public holiday are entitled to 1.5 times ordinary pay as well as a day in lieu. Only open on public holidays if it makes good economic sense or you have no choice.
Employees get a paid day off on a public holiday if it’s a day they would have normally worked on.
It is very important to calculate the right rate of pay for leave and holidays. Annual holidays are calculated differently from public and alternative holidays, sick and bereavement leave.
Payment for annual annual leave is made at the start of the employee’s holiday and paid at a rate which is the greater of the employee’s ordinary weekly pay or average weekly earnings.
This must be calculated each time the employee goes on leave as the appropriate payment rate may change even from pay period to pay period.
Annual holidays are paid at whichever rate is the higher of:
Your payroll should work this out for you. Expect to pay a higher rate over shutdown particularly for waged/hourly employees.
Sick leave, bereavement leave, alternative holidays and public holidays are paid at the rate of either relevant daily pay or average daily pay.
Relevant daily pay means paying an employee what they would have earned if they were at work on the day. This also includes payment such as commissions, bonuses & overtime if the employee would have received them on the day. If it’s not possible or not practical to work out relevant daily pay, or because an employee’s daily pay varies in the pay period in question, an employer may use average daily pay.