What’s the difference between holiday pay and annual leave?

When a full-time or part-time employee starts a new job, they accumulate holiday pay from their start date. Holiday pay is 8% of their gross earnings and calculated in dollars.

When the employee reaches their anniversary date, their holiday pay becomes annual leave and is calculated in hours or days. At this date, they can take annual leave. They also start accumulating holiday pay for the next year.

What do I pay an employee who works a public holiday?

If an employee works a public holiday, they are entitled to be paid time-and-a-half for the hours worked. And, if the public holiday happens to fall on a day they normally work, they’re also entitled to a day in lieu.
Public holidays over the Christmas and New Year period

This year, the holidays fall on a Friday and Saturday. If the employee:
– doesn’t usually work that day, the holiday is transferred to the following Monday or Tuesday. The employee still gets a paid day off if they usually work on these days – or
– usually works that day, the holiday remains at the traditional day and the employee is entitled to a paid day off.

Note that an employee can’t be entitled to more than four public holidays over the Christmas and New Year period, regardless of their work roster.

Why is the leave rate sometimes higher than the normal pay rate?

Remember that the leave rate is the higher on the average weekly rate or the ordinary weekly pay. Average weekly includes things like overtime, regular bonus and commissions.

Can I process a lump sum payment for the Christmas period?

It is best not to process as a lump sum but rather process one week at a time. Although you can divide the tax over the period, the leave divisor will do it as one.

This article was kindly supplied by Bay Business Support