Ordinary Pay

Ordinary Pay is defined in the New Zealand Holidays Act as the remuneration of the worker's normal weekly number of hours of work calculated at the ordinary time rate of pay. This ordinary time rate of pay includes allowances usually found in the wage clauses of an employment agreement such as service pay, shift allowance, leading hand payments and qualification allowances.

To calculate an employee's Ordinary Pay, the employee's Base Hours are multiplied by the employee's Pay Rate and any allowances are added to make up the employee's ordinary pay.

Example

Base Hours for week 38
Pay Rate $13.00 per hour
Leading Hand Payment $15.00 per week
Service Pay $10.00 per week
Ordinary Pay $519.00 per week

This will result in an Ordinary Pay Rate of $13.6579 per hour ($519.00/38)

Average Weekly Earnings is defined as an average of an employee's gross earnings over a user specified period of time.

This method of calculation is setup in Average Rate Rules.

Example

Base Hours per week 38
Annual Earnings $52,000
Average Weekly Earnings $1,000
   
This will result in an Average Pay Rate of $26.3158 per hour ($1000.00/38)
When an employee has not been paid resulting in zero weeks, this will not be included in the calculation
   
4 weeks leave without pay 0
Gross Earnings $30,000
Average Earnings $30,000/48 (52-4) $625

 

 

Accrued Leave is paid at the greater of:

  • Ordinary Weekly Pay at the time when the period of leave begins or
  • Average Weekly Earnings over the 12 month period before the annual holiday is taken.

Holiday Pay is paid at either:

  • Ordinary Pay Rate stored on the masterfile at the time when the leave is taken or
  • Average Weekly Earnings for the 12 months prior to the leave being taken.

Leave is paid at the greater monetary value.

Example

 An employee has been employed for two years, starting on 01/01/XX. The employee is entitled to 3 weeks annual leave per year and has accrued 6 weeks leave.

When the employee applies for 4 weeks leave, the Ordinary Pay Rate on the masterfile is $460.00 and the employee's Average Weekly Earnings over the 12 month period prior to 01/02/XX is $468.00.

The 4 weeks leave will be paid at the Average Weekly Earnings figure of $468.00

 

The payment for holidays taken in advance is based on the greater of the employee's Ordinary Weekly Pay or Average Weekly Earnings.

Average Weekly Earnings where employees have less than 12 month service are calculated based on the total gross earnings from starting work until the last pay period before the holiday, divided by the number of weeks stored.

Example

Date of Start 01/02/09
Entitlement Date 01/02/10
2 weeks leave before entitlement is due 01/12/09
Total Gross Earnings 01/02/09 to 01/12/09 (47 weeks) $21,000.00
Average Weekly Earnings ($21,000.00/47) $446.90
Ordinary Pay at 01/12/09 $350.00
Holiday Pay will be paid at the Average Weekly Earnings Rate $446.90

Average Weekly Earnings where employee has more than 12 months of service but is taking leave in advance entitlement is calculated based on the 12 months prior to the end of the last pay period before the holiday.

Date of Start 01/02/09
Entitlement Date 01/02/10
Entitlement Nil
1 weeks leave before entitlement is due 01/08/09
Total Gross Earnings for the prior 12 months $25654.00
Average Weekly Earnings ($25,654.00/52) $493.35
Ordinary Pay at 01/08/08 $500.00
Holiday Pay will be paid at the Ordinary Weekly Pay Rate $500.00