Leave pay rates | Payroll Guide

The purpose of the Leave Pay Rates setting is to configure the applicable calculation method that you will apply in a pay run for daily-based and weekly-based leave specific to that employee. To do this, you go to the Employee File Pay Rates page, then under the Leave Pay Rates section, select the appropriate calculation method. The default settings for each employee are set to te Relevant Daily Pay (RDP) option and Ordinary Weekly Pay (OWP) agreed rate option.

RDP/ADP calculation method for daily based leave

Relevant daily pay (RDP) or average daily pay (ADP) calculation method is used for calculating daily based leave such as Bereavement leave, Alternative leave, Public holidays, Domestic Violence leave, and Sick leave.

Relevant daily pay (RDP)

RDP means the amount of pay that the employee, employed on a regular working pattern, would have received had the employee worked on the day. You must use RDP unless the employee’s daily pay varies in the pay period or it is not possible or practical to determine RDP. In these two situations only, you may, but do not have to, use ADP.

Average daily pay (ADP)

ADP is used if it is not possible or practical to determine an employee’s relevant daily pay or if the employee’s daily pay varies within the pay period when the holiday or leave falls. Note that if an employee is set to Average daily pay and their ADP rate is lower than their RDP rate, the platform will automatically override ‌the RDP rate. 

OWP calculation method for annual holidays

For annual holidays, you would use the OWP calculation method of OWP agreed rate or OWP four weekly pay formula. It will help calculate the greater of ordinary weekly pay (OWP) and average weekly earnings (AWE) for annual holidays.

Ordinary weekly pay (OWP) - agreed rate

OWP agreed rate is the amount ‌an employee who you employee on a regular working pattern would normally earn for an ordinary working week.

Ordinary weekly pay (OWP) - four weekly formula

When it is not possible to work out ordinary weekly pay regarding the amount the employee normally receives for an ordinary working week then ordinary weekly pay must be calculated by the ordinary weekly pay formula.

Note that if an employee is set to OWP four weekly pay and that rate is lower than their OWP agreed rate, the platform will automatically override that with the OWP agreed rate. To view your employee's leave pay rates, you can run the Employee Leave Rates report, which you can find under the employee section in the reports screen. To read further information on how we calculate annual holidays in a pay run using AWE and OWP, refer to the following article.

If you have any questions or feedback, please let us know via support@nzpayroll.co.nz

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