Average daily pay rate calculation for the relevant daily pay rate method (New Zealand)
The Holidays Act 2003 introduced the Relevant Daily Pay calculation for Family Violence Leave, Bereavement Leave, Alternative Leave, Public Holiday and Sick Leave (commonly known as FBAPS Leave). The Relevant Daily Rate is to pay the employee "the amount of pay that the employee would have received had the employee worked on the day concerned". The Act states that if it is not possible to determine the Relevant Daily Pay or the employee rate varies then the pay must be calculated in accordance with a formula specified in the Act.
The formula specified in the Holidays Act 2003 was a 4 Week Average calculation. The Holidays Amendment Act 2010 changed the formula to a 52 Week Average calculation which became effective as at 01 April 2011.
An employee's Standard Pay may not be suitable for calculating the Relevant Daily Pay rate due to working irregular hours, piece rates, overtime or commission payments, etc. In these cases the Average Daily Pay calculation could be used.
To confirm the Relevant Daily Pay Rate Method being used for an employee and to be able to change the Method to the Average calculation or the most suitable option, follow the steps below:
- Go to the Employee Maintenance screen and click on the Sick and Other Leave tab.
- Check the Relevant Daily Pay Rate Method field. If the employee should be using the Averaging method then select that method or the most suitable method from the list.
This setting only affects the Relevant Daily Pay Rate Method and will not have any impact on Holiday Pay calculations as Holiday Pay has its own methods for rate calculations.
When using the Averaging method, check the Days Paid (or Hours Paid) information through the Edit Days (or Edit Hours) button to ensure the correct calculation of the Relevant Daily Rate. If required, correct the figures in this screen for each pay being used by the calculation, i.e. if the method is selected as Average Daily Pay then check and correct pays from the last 52 weeks.
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.