Converting Annual Leave to Weeks for Opening Leave Balances

Many older systems record Annual Leave balances in hours or days. A survey done in the early 2010's showed that 80% of companies recorded leave in hours. Since then, the recommended approach has changed.

PayHero records annual leave in weeks in line with the latest guidance from MBIE. This ensures employees get their mandated four weeks of leave if their work patterns change.

For employees who work regular weeks, converting from hours or days to weeks is just a simple division.

In other situations, you may be able to come to an agreement as to what constitutes a week with the employee to use as a divisor. This might be based on their recent work patterns.

To get a more accurate leave balance where employees have variable work patterns, or where their work pattern is set but has changed over time, a simple division may not suffice. Instead, you could consider recalculating leave balances from first principles.

PayHero does not need to know how much leave has been accrued over the last year. It is only interested in leave Due. This means that an employee who has been with you for less than a year and has not taken leave will simply have a zero balance. 

For employees who have been with you for more than a year, their entitlement is simply four weeks for every leave anniversary they have crossed. For example, an employee that has been with you for between 5 and 6 years has crossed 5 anniversaries so has become entitled to 5 x 4 weeks = 20 weeks of leave. This is the case regardless of how their leave patterns have changed over that time.

Next, you need to deduct from that balance all leave that was taken, evaluated in terms of weeks based on their work pattern at the time the leave was taken. Where employees are taking full weeks of leave this is simple. Where they are taking odd days it becomes a little trickier, but it's often fairly obvious how it should be converted. Provided you have good leave records this won't be particularly time-consuming.

Deduct the leave taken from the leave entitlement and you have the value to load into PayHero.