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Setting up pay-as-you-go for annual leave - NZ

If you have fixed term employees, or employees with changing work patterns, you might need to pay their annual leave at a pay-as-you-go (PAYG) rate of at least 8%. Some employees might need to be paid at a higher rate, depending on their contract.

To pay these types of employees in MYOB Advanced Payroll, you need to create a PAYG pay item.

To be able to select all the correct pay item settings, you need to be using version 2021.2.300 and later.

For more information on PAYG annual leave instalments, see the Employment New Zealand website.

Create a PAYG pay item
  1. Go to the Pay Items screen (MPPP2210).
  2. On the toolbar, click the New Pay Item icon ().
  3. Complete the Pay Item ID, Description and Payslip label fields.
  4. Click the Calculation Method tab.
  5. Set the Method to Percent Of.
  6. In the Percentage section:
    1. In the Percentage field, enter the PAYG percent agreed to in your employee's contract. For example, if you and your employee agreed to the minimum 8%, enter 8, as shown in the following screenshot.
    2. From the % of dropdown, select Income eligible for Holiday Pay.
  7. On the toolbar, click the Save icon ().
  8. On the toolbar, click Pay Item Liabilities. The Pay Item Liabilities screen opens.
  9. For the PAYG pay item you created, select all the checkboxes, including Liable for Holiday Pay.
  10. On the toolbar, click the Save icon (). You can now add the PAYG 8% pay item to an employee's standard pay.
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