Working out what an employee gets paid for taking a day off on annual leave is not always easy.

According to Employment New Zealand, employees must be paid the right amount at the right time for holidays and leave. Annual holidays and worked public holidays are paid differently from other types of leave.

Annual holidays are paid at whichever rate is the higher of the employee’s:

• ordinary weekly pay at the beginning of the annual holiday; or
• average weekly earnings for the 12 months just prior to the end of the last pay period immediately before the annual holiday

Remember, Christmas and New Year’s Day fall on a Sunday this year.

For an employee working on these days who wouldn’t normally work on Sundays, the public holiday is treated as falling on the following Tuesday.

If your employee would normally work on Sunday, then the public holiday is treated as falling on Sunday (the calendar date of the public holiday).

Whichever day the entitlement falls on, if the employee works on that day, they will get time and a half for that day. They may also get an alternative day off. If the public holiday falls on what would otherwise be a working day for them, and they work on that day, they are entitled to an alternative holiday.

Find out more about calculating payment rates for holidays and leave at Employment New Zealand.

Holiday pay can put a strain on your business’ finances – talk to us about your financial planning for the holiday season.