Skip to main content
Skip table of contents

Accruing leave using the permanent part-time/pro-rata holiday pay method (New Zealand)

The Holidays Act states that employees are entitled to 4 weeks of leave after 12 months of continuous employment. If an employee works varying hours then the employer and employee may agree on what is a work week for the employee and pay them appropriately.

This article applies when Holiday Pay is setup in Days or Hours. When Holiday Pay is setup in Weeks, refer to White Papers available here.

About pro-rata holiday pay accrual methods

The Pro Rata method has commonly been used in the past for variable workers, but it can produce inaccurate Holiday entitlements and is no longer a recommended method for management of Holiday Pay.

  • This method enables users to accrue Holiday Pay entitlement as a percentage of Hours or Days worked/paid.
  • Pro Rata allocates a portion of time for hours or days paid rather than weeks balances based on the agreed definition of a week
  • This method holds Holiday Pay balances in a measure of Days/Hours units and the entitlement to 4 weeks must be manually managed.
  • This method pays Holiday Pay rates in units of Days or Hours and these values must be checked.

Important notes

If you choose to use the Pro Rata method:

  • This MUST be discussed with the employee and agreement put in writing.
  • Pro-rata method doesn't guarantee 4 weeks entitlement and you will need to check entitlements and balances regularly as work patterns change, settle and roll over. I.e. where an employee has increased their work pattern, they will now be entitled to more weeks/days/hours based on their new current work pattern, not the historically lower work pattern.
  • You will need to keep a spreadsheet to manage portions of leave taken
  • You will need to monitor your Daily/Hourly rates in Exo Payroll against a weekly rate when on this method to ensure that you are not paying less than legislated minimum.

For further information, refer to White Papers available here.

Please seek advice from an employment relations specialist or an MBIE labour inspector before implementing this method.

Need more help? You can open the online help by pressing F1 on your keyboard while in your software.

You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.

JavaScript errors detected

Please note, these errors can depend on your browser setup.

If this problem persists, please contact our support.