The Holidays Act (2003): Why your payroll software should display calculation transparency

Leave calculation transparency

With underpayment scandals on the rise, achieving payroll compliance is a mandatory requirement for all businesses. Yet a common hurdle faced by many payroll professionals and bureaus is finding a reliable payroll software that interprets the Holidays Act (2003) accurately.

According to the Act, leave calculations require consideration of certain set circumstances such as:

  • Employee’s ordinary weekly pay (OWP) at the beginning of the annual holiday 
  • Employee’s average weekly earnings (AWE) for the 12 months just before the end of the last pay period before the annual holiday 
  • If a public holiday falls during an annual leave period 

Payroll software that displays calculation breakdowns helps payroll professionals in three ways: 

  1. Promotes an understanding on how calculations are produced and variables are considered
  2. Provides details for payroll professionals to easily assess calculations and ensure are no errors or data issues
  3. Collects a record of the breakdown of the calculations for auditing purposes

By seeking a transparent payroll software, outsourced payroll providers in particular are equipped with the tools to provide audits for clients and advise on compliance. Bureaus then have more time to work on advisory, with technology reducing manual work. Moreover, when fair employee entitlements are achieved, employees are happier and the positive reputation of a business is maintained, making it a win-win for everyone!

Achieve compliance confidently with KeyPay 

KeyPay is a cloud-based payroll and workforce management platform built for New Zealand legislation to ensure full compliance for payroll bureaus and businesses. 

KeyPay’s streamlined employee data management and automated leave calculations ensure holiday pay is accurately interpreted and applied, compliant with the Holidays Act (2003). The system also breaks down leave calculations to show exactly how each amount is determined to make auditing a breeze. 

Try KeyPay free, or download our white paper: Navigating the Holidays Act (2003) and Ensuring Payroll Compliance.

Carissa Tan

Marketing at KeyPay


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