Incorrect holiday pay amount when using the 4 week average calculation

The Holidays Act 2003 states that Holiday Pay is to be paid out at a rate that is based on the greater of two calculation methods - the employees Ordinary Weekly Pay as at the beginning of the annual holiday or the Average Weekly Earnings for the 12 months immediately before the end of the last pay period before the annual holiday.

This article only applies to 4 Week Average Calculations when the Holiday Pay is setup in Days or Hours. When Holiday Pay is setup in Weeks, refer to White Papers available here.

In MYOB Exo Payroll, the Ordinary Weekly Pay calculation is determined by the Ordinary Daily Rate setting which gives the options of Standard Pay, 4 Week Average or Higher Rate. The Standard Pay option looks at what is contained in the Standard Pay tab of the Employee Maintenance screen for that employee, whereas the 4 Week Average option looks at the historical data contained in the Pay History button on the Holiday Pay screen and the Higher Rate option uses whichever is the higher rate between the Standard Pay and 4 Week Average options.

The Ordinary Daily Rate settings and pay information used are specific to each employee and do not affect any other employees calculations.

If the 4 Week Average calculation is being used and the Holiday Pay amount is being valued differently than expected, it may be that some information in the Edit Days Paid History screen is missing or incorrect. The Edit Days Paid History screen shows a historical record of pays processed for the employee including the Days Paid and the Gross Pay figures for each pay.

For the Holiday Pay to be calculated correctly when using the 4 Week Average, the Edit Days Paid History screen should reflect the days figure appropriate to the Holiday Pay Entitlement settings for the employee.

If the employee has been setup to use the Permanent Part-Time Method then the Days Paid figure should reflect the actual days paid in each pay period.

• The Days Paid figures should include any paid days that the employee is receiving payment for in the pay period, including any leave days being paid.

For an employee that is setup to receive a set Annual Entitlement such as 20 days, then the Days Paid figure should reflect the appropriate part of the entitlement based on the pay frequency. e.g. an employee getting 20 days per year of Holiday Pay is getting this entitlement based on working 5 days per week. The Days Paid for a Weekly frequency should therefore be 5 while a Fortnightly pay is 10 and a Monthly pay would be 21.67.

Any Holiday Pay days being cashed out as per the Holidays Amendment Act 2010 are not to be included in Holiday Pay calculations. This means that the Days Paid figure for that particular pay should not include the number of days being "cashed out".

Browse the Days Paid column of the Edit Days screen to confirm that the information appearing is correct.

After checking and making any adjustments to the information in the Edit Days Paid History screen, the Holiday Pay amount should calculate more appropriately.

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.