v2011.1.925 [Sep 27, 2011]
This release includes new features to handle changes to the Holiday Act. This includes the option of cashing in annual leave and changes to the holiday pay calculation. These changes apply from 1 April, 2011.
Cashing in annual leave
From 1 April 2011, the Holidays Act allows employers and employees to mutually agree to pay out a maximum of one week of annual leave. This is known as cashing in annual leave.
There are a number of rules that apply to this scheme, so we recommend you refer to the Department of Labour website at dol.govt.nz for more information. We have provided a summary of the changes below:
Employees need to submit the cashing in leave request in writing
Employers can decline any request
Employers cannot require employees to have leave paid out
Leave can only be paid out following an employee's next anniversary date on or after 1 April 2011
A maximum of one week can be paid out during an employee's entitlement year (that is, the period between holiday anniversary dates)
Leave must be paid out at the same rate as when it is taken as holidays (that is, the normal leave rate calculation applies)
Leave which is paid out is not included in gross earnings for the purpose of calculating leave rates and balances.
Cashing in annual leave in MYOB Payroll
New annual leave pay code
A new annual leave pay code has been added to the default list of pay codes. You need to use the ANHLCASH-Annual Leave Paid Out pay code to ensure that leave balances are automatically adjusted and that leave is correctly calculated.
Do not use the ANHL-Annual Leave or HP-Holiday Pay pay codes for cashing in annual leave. Using these will inflate the employee's gross earnings and lead to incorrect leave calculations.
Adding the leave paid out pay code to employee defaults
Recording annual leave paid out
You pay out annual leave when you enter pays.
Reporting annual leave paid out
All holiday and leave reports have been updated to include annual leave paid out amounts.
Changes to holiday calculations
The Holidays Act changes include a new formula that can be applied to the payment of public holidays, alternative holidays, sick leave and bereavement leave. You can find detailed information of this change at the Department of Labour website at dol.govt.nz.
In summary, employees are still entitled to be paid holidays at their relevant daily pay rate (that is, what they would have earned, had they worked on the day). However, a new formula has been introduced to help calculate the holiday pay rate where it is not possible or practical to calculate the relevant daily pay. For example, where the employee works highly variable hours in the period when the holiday occurred. In these situations, you can now use an Average Daily Pay rate.
The average daily pay is the gross earnings for the last 52 weeks, divided by the number of whole or part days worked to earn those gross earnings. This calculation replaces the previous requirement of a 4 week average earnings calculation.
The gross earnings total is divided by the estimated number of days worked. As the payroll does not store the date of every day worked by default, this estimate is based on the employee's standard days per week. If the employee has worked variable days over the 52 weeks, the days worked value should be overwritten to correct the calculation.
If you want to record the actual days worked for future reporting, use the Timesheets or the Split Pay option to assign pays to specific dates.
For employees paid an hourly rate, the daily rate is divided by the employee's standard hours per day to derive an hourly rate.
