Holiday Pay As You Go

Holiday Pay can be paid with an employee's pay when an employee is on a fixed term contract on less than 12 months, or when they work on a basis that is so intermittent or irregular that it is impracticable for the employer to provide the employee with 4 weeks’ annual holidays. This is known as pay-as-you-go. For information about when pay as you go provisions can be used please refer to the MBIE website.

To set an employee to receive their Holiday Pay on a pay-as-you-go basis in PayHero, view their record under Manage > Employees. 

Ensure the employee's normal rate is exclusive of holiday pay, and the holiday pay % on the employee's Leave tab is set appropriately (usually 8%). On their Leave tab select the check box Pay As You Go under the Holiday Pay settings to include this employee's holiday pay with each pay. 

For an existing employee who already has Holiday Pay Accrued, PayHero will assume the employee has always been on pay-as-you-go and will enter the same amount into Holidays Paid Out. If they have not yet been paid out that amount, ensure you set the Holidays Paid Out figure to $0.

Once an employee is set to receive Holiday Pay As You Go, the appropriate amount will be automatically calculated by PayHero each time a pay is created. 

In the first pay after setting an employee on pay-as-you-go, PayHero will automatically pay out all outstanding Holiday Pay. If the employee wasn't previously on pay-as-you-go and their Holidays Paid Out was correctly set to $0, you'll see a warning message in the draft pay stating that the holiday pay amount is different to the % amount set for that employee:

Learn more on what to do if an employee who is on a pay-as-you-go arrangement becomes permanent here: Changing Pay-As-You-Go Employees to Permanent