Understanding the Ordinary Daily Rate field in an employee's holiday pay

On the Employee's Holiday Pay screen there is a field called Ordinary Daily Rate. This field specifies how the Ordinary Daily Rate is to be calculated when Holidays are paid to an employee.

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.

Regardless of whether the employee Ordinary Daily Rate is set to Standard Pay, 4 Week Average, or Higher Rate, the comparison will always be made with the Average Weekly Earnings/52 week average and will apply the higher of both rates.

Here's a picture of the Holiday Pay screen.

Depending on which option is selected the following will occur when Holidays are paid:

• Standard Pay - Looks at the employees Standard Pay template then divides the Gross Taxable Earnings (that are liable for Holiday Pay) by the Days Paid (or Hours Paid) figure to get the Ordinary Daily Rate (or Ordinary Hourly Rate).
  

  

• 4 Week Average - takes the Gross Taxable Earnings (that are liable for Holiday Pay) from the last 4 weeks then divides that figure by the Days Paid (or Hours Paid) from those same 4 weeks to get the Ordinary Daily Rate (or Ordinary Hourly Rate). To check the figures being used by the Payroll software for this calculation click on the Pay History button to the right of the Last 12 Months figures.
  

  

• Higher Rate - this calculates the Standard Pay rate and the 4 Week Average rate for the employee each pay (as described above). Whichever is higher becomes the "Ordinary Daily Rate".
  For further information regarding the Higher Rate option, click here.

Where an employee has no Standard Pay value, the 4 Week Average will be used.

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.