Your Guide to Public Holiday Pay in NZ
Calculating public holiday pay to NZ standards can be one of the trickiest aspects to get right. In payroll, there is a lot to keep track of to make sure you are compliant with the relevant laws. However, if you get it wrong, you are leaving yourself open to a considerable amount of risk. Get it right before the next public holiday in NZ by following the below guide.
What is a Public Holiday?
In New Zealand, employees are entitled to four weeks per year of annual leave. In addition to this, they get 11 public holidays every year as long as those public holidays fall on their normal working days.
Upcoming 2024 Public Holidays:
Labour Day Monday – 28 Oct 2024
Christmas Day – Wednesday 25 Dec 2024
Boxing Day – Thursday 26 Dec 2024
+ Some regions have their regional anniversary days in the latter half of the year, but these vary according to the area.
Some businesses will close on public holidays, while others are allowed to remain open, depending on the rules for that day. How much employees get paid and whether they work varies depending on whether your business operates on that public holiday.
How is Public Holiday Pay Calculated in NZ if the Employee is Not Expected to Work
A question we commonly get asked is ‘how do you calculate public holiday pay?’. Staff are always keen to know if they will get paid more on public holidays or not. The answer is - it depends.
Above, we mentioned that employees are entitled to public holidays. Be aware that a contractor or casual employee is entirely different from an employee in the eyes of the law. Rules and regulations for contractors and casual staff is a topic for another day.
If your business is closed on public holidays, your employees will get a paid day off, as long as it’s a day they would usually work. This is known as an ‘otherwise working day’ because they would have been at work without a public holiday.
However, if the public holiday happens while the employee is taking pre-planned unpaid time off or is on ACC, they would not have usually received a payment that day, so they are not owed a paid day off.
How Do You Calculate Public Holiday Pay for Staff Who Will Work on That Day?
If you are open on a public holiday, the employees who work that day must be paid at a time and a half rate.
For those who usually work on that day, this is known as an otherwise working day, and you will need to give them an alternative paid day off. In this context, an otherwise working day is where the employee would usually have worked, were it not a public holiday. However, an otherwise working day can also refer to a day a staff member would have worked if they were not away on annual, sick, or bereavement leave.
Weekend public holidays are a little different. If an employee does not usually work a Saturday or Sunday, they will be entitled to a public holiday the Monday, hence the term ‘Mondayisation’.
Can You Transfer a Public Holiday?
If you have a request from an employee to transfer a public holiday, you may be unsure how you are allowed to proceed. If you and an employee both agree to it in writing, you can transfer a public holiday to be observed on another working day. Sometimes employees will request this to get a day off of their choice, or you may request this if your business needs require it. This must be transferred to an otherwise working day for the employee.
Get Help with Public Holiday Payments
As you can see, calculating public holiday payments for your employees can quickly become an extremely complicated process. It takes many employers hours to figure it out every time a public holiday pops up to ensure their staff are getting paid correctly.
If you are ever unsure how to calculate holiday pay for the 2024 public holidays, you should always refer to the official Holidays Act 2003. However, many business owners do not have the time or energy to spend hours sorting out the payroll for public holiday pay in NZ. If you are dreading the next public holiday, for this reason, it might be time to get some assistance.
Core Payroll specialises in helping small to medium businesses sort out their payroll. When you register with us, you will be assigned a Payroll Consultant to provide advice and guidance to you on matters such as public holiday pay. Our preferred system- PayHero makes managing public holidays easier than ever with automated calculations for your employees’ public holiday entitlements.
Ensure you are doing it right by outsourcing your payroll requirements and getting advice on whether or not your staff should be working on a public holiday.