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NZ Payroll - Holiday pay Vs annual leave

Started by Sharna Russell -   in NZ Payroll

An employee is having to take time off to nurse a very sick child (will be a while before he returns) and i am trying to sort out what exactly we owe him.
so at the moment i have holiday pay showing as $483 owing, which amounts to 19 hours (there abouts). if i pay him annual leave of the 19 hours will this take his holiday pay amount back to 0.
Also his holiday pay is showing 144 hours, is this the amount the hours we owe him now, or is this what he is owed in general if he stays employed until his next annivarsary date (01/18).
The holiday pay amount is the hours still owing from the last anniversary date. The holiday pay is the 8% accrual for the current year.

Hope that helps.

Tracy Mawson  

Hey Sharna - at any time an employee is owed two separate amounts - Holiday Pay and Annual Leave.

During the first year of employment, an employee has no Annual Leave due. Employees who take annual leave during this period are essentially taking leave in advance. For leave taken in advance, Holiday Pay will not be affected (will not decrease) and instead their Annual Leave balance will go into a negative amount of hours, which is correct.

When the employee reaches their employment anniversary and they become entitled to Annual Leave, Xero:

Reverses the Holiday Pay balance based on 8% of the gross earnings from previous pay runs and information from the Opening Balances tab and,

Adds the Annual Leave entitlement from the Hours Accrued Annually field, and the Annual Leave balance is updated to include leave taken in advance.

The process then starts again with Holiday Pay accruing each pay period until their next anniversary date.

If you want us to have a look at this individual employee, please send us through a direct support query and we can help further.

Tracy - thanks for your assistance here!

Hayley T (Xero Staff)  

This is an excellent description of how the report works it would be great to see something like this in the guide to help understand what these reports are actually saying as I found the guide really said nothing and I was still very confused and I'm glad I decided to look here for my answers as this covered it perfectly.

Rachel Boyle