As the holiday season approaches, it is timely to remind employers of their obligations for annual leave, bonus payments and casual labour.
Leave payments are calculated at the greater of:
- the employee’s ordinary weekly pay at the time the holiday is taken; or
- the employee’s average weekly earnings over the twelve month period before the annual leave is taken.
Child support, kiwisaver and student loan deductions continue to be deducted at the normal rate from an employees holiday pay.
Employees are entitled to two weeks of their annual leave as uninterrupted annual leave. Employers are entitled to determine when annual leave is to be taken.
Further, if your business has a ‘closedown’ or ‘shut’ period that includes public holidays (such as Christmas or New Years), employees are entitled to be paid for the public holidays if it would otherwise be a working day for the employee.
For further information on Leave Entitlement, please click here.
PAYE must be deducted from all lump sum payments. The rate of PAYE depends on your employees tax code.
Kiwisaver contributions to be deducted as normal.
Student loan deductions apply if your employee uses an M SL or ME SL tax code and earns more than $390 gross a week.
To calculate the PAYE for a lump sum payment, the IRD offer an online calculator. Click here to view.
Casual employees, like all Employees, require an Employment Agreement and are required to complete a tax code declaration (IR 330) form to be taxed through the payroll system.
Casual Employees are entitled to be paid 8% holiday pay on top of their hourly rate and therefore do not accrue annual leave.
Casual employees are not automatically enrolled in Kiwisaver. If they wish to be, a KS2 Form must be completed.
Child Support and Student Loan deductions are to be deducted where applicable.
For further information on Casual Employees, please click here.
If you have any queries regarding your wages for over the holiday period, please contact Christina in our office.