Paying via payroll system

How employers and payroll teams can check that their payroll system complies with minimum leave entitlements and payments in the Holidays Act 2003.

The Holidays Act 2003 provides specific minimum holidays and leave entitlements and payments that must be met by New Zealand employers. This includes making appropriate calculations every time leave or holidays are taken.

To support compliance, payroll systems need to make all the calculations in the Holidays Act 2003.

As well as specific calculations, payroll systems need to:

  • be able to be updated to reflect business operations (e.g. changing employee work patterns, rosters etc.)
  • record all relevant time worked and pay paid
  • have accurate and up to date information.

If there is complexity or any change in employee work patterns, it needs to be reflected in the system. In many cases, an employee’s working patterns and therefore pay for leave and holidays are unique to them.

Calculating annual holiday payments has examples on how to calculate leave and holiday payments.

Assessing whether your payroll system can comply with the Holidays Act 2003 [PDF 454KB] will help you check that you are in line with legislation and providing employees with at least the minimum leave and holidays pay and entitlements.

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