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Topic # 90981 4-Oct-2011 23:11 Send private message

Hypothetical question: I have a couple of week leave outstanding. If I were to quit my job today, does that leave get paid out at my current salary rate? Most of the leave was 'earned' when I was on a lower salary than I am on now. Or does each day get paid at my pay rate when I 'earned' that days leave?




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  Reply # 529256 4-Oct-2011 23:12 Send private message

What you are on now, as if you took it before you left, it would be what you are paid now, not back when you earnt it.

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  Reply # 529257 4-Oct-2011 23:13 Send private message

Current salary. If you took two weeks off today, you would get paid for that at your current salary.



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  Reply # 529259 4-Oct-2011 23:13 Send private message

Excellent




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  Reply # 529269 4-Oct-2011 23:38 Send private message

And the associated tax deduction :-(

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  Reply # 529276 5-Oct-2011 00:07 Send private message

gzt: Current salary. If you took two weeks off today, you would get paid for that at your current salary.


Actually its your average wage weekly wage over the last 12 months or your existing weekly wage.. whatever is the highest. 

Described here:

http://www.dol.govt.nz/er/holidaysandleave/annualleave/employee-resignation-termination.asp

Where an employee resigns or employment ends after becoming entitled to annual holidays, the first amount to be calculated is the greater of ordinary weekly pay or average weekly earnings for the annual holidays to which the employee is entitled under the Act, as if the holidays were being taken at the end of the employment. 

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  Reply # 529277 5-Oct-2011 00:15 Send private message

ajobbins: Hypothetical question: I have a couple of week leave outstanding. If I were to quit my job today, does that leave get paid out at my current salary rate? Most of the leave was 'earned' when I was on a lower salary than I am on now. Or does each day get paid at my pay rate when I 'earned' that days leave?

Don't forget that if there is a public holiday durring your payout period of holiday pay then you get paid that too. i.e if i had 4 weeks owing to me and quit today then I should get 4 weeks and 1 day because of Labour Day.




Hmmmm

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  Reply # 529298 5-Oct-2011 07:42 Send private message

cisconz:
ajobbins: Hypothetical question: I have a couple of week leave outstanding. If I were to quit my job today, does that leave get paid out at my current salary rate? Most of the leave was 'earned' when I was on a lower salary than I am on now. Or does each day get paid at my pay rate when I 'earned' that days leave?

Don't forget that if there is a public holiday durring your payout period of holiday pay then you get paid that too. i.e if i had 4 weeks owing to me and quit today then I should get 4 weeks and 1 day because of Labour Day.

Are you sure? I've never heard this. It makes sense, since you can think of getting paid out your holiday pay as just taking leave after your end date but like I say, I've never heard this.

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  Reply # 529319 5-Oct-2011 08:17 Send private message

bazzer:
cisconz:
ajobbins: Hypothetical question: I have a couple of week leave outstanding. If I were to quit my job today, does that leave get paid out at my current salary rate? Most of the leave was 'earned' when I was on a lower salary than I am on now. Or does each day get paid at my pay rate when I 'earned' that days leave?

Don't forget that if there is a public holiday durring your payout period of holiday pay then you get paid that too. i.e if i had 4 weeks owing to me and quit today then I should get 4 weeks and 1 day because of Labour Day.

Are you sure? I've never heard this. It makes sense, since you can think of getting paid out your holiday pay as just taking leave after your end date but like I say, I've never heard this.


Hi, I manage a payroll bureau.  When you resign, if you have any outstanding leave that takes you past a public holiday, then your current employer must pay you for that public holiday.
Your outstanding Annual Leave is paid out at whatever is higher, the average (hourly) rate of the last 52 weeks (the 52 weeks obviously moves each week that goes by) or your current (hourly) rate.
Therefore if you've received a pay increase during the 52 weeks, the 52 week average is most likely going to be lower than your current (hourly) rate.  You're always paid the higher rate.

Some employers will take the gross of the termination pay and divide that by your standard gross pay e.g. 5000 / 2500 = 2.  So they will tax the termination pay as if it represents 2 weeks.  Others will not put any tax override in.  Therefore for tax purposes the IRD will assume you earn $5,000 a week and calculate the tax based on that.  There is no ruling by the IRD as to how to tax the termination pay when it is different to your normal weekly gross.

Please be aware that outstanding leave is leave you have accrued from a past Annual Leave year.  The leave you are accruing in your current Annual Leave year is paid out at 8% of your Gross Earnings (that qualify). Some allowances paid may not qualify, the likes of a Bonus for instance doesn't have to be included in the Gross Earnings for the purpose of calculating the 8%.
 
If you're really keen, you can read the Holidays Act.  It'll put you to sleep.   




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  Reply # 529341 5-Oct-2011 08:56 Send private message

bazzer:
cisconz: Don't forget that if there is a public holiday durring your payout period of holiday pay then you get paid that too. i.e if i had 4 weeks owing to me and quit today then I should get 4 weeks and 1 day because of Labour Day.

Are you sure? I've never heard this. It makes sense, since you can think of getting paid out your holiday pay as just taking leave after your end date but like I say, I've never heard this.

An old employee left just before Easter and brought it up when they left, that is how I learnt about it. Most people don't know it so it pays to double check as I know a few people have missed out.




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  Reply # 529370 5-Oct-2011 09:38 Send private message

So, Neets, if I have been at my position for less than a year and I was to resign, I would be only paid out the accrued hours at 8% of the total value - e.g. if I had two weeks leave accrued I would be paid 8% of my normal fortnightly pay?




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  Reply # 529395 5-Oct-2011 09:59 Send private message

bener: So, Neets, if I have been at my position for less than a year and I was to resign, I would be only paid out the accrued hours at 8% of the total value - e.g. if I had two weeks leave accrued I would be paid 8% of my normal fortnightly pay?



No. You would be paid 8% of what you have earned since you started there. (8% of annual wage ~ 4 weeks pay if you worked a whole year). You would be taxed on this at your normal rate and maybe other adjustments, you would also recieve payment for any Days in Lieu that are owing to you (if you worked a public holiday and did not take another day off in compensation the payroll system should still have that there for you)  

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  Reply # 529455 5-Oct-2011 11:11 Send private message

Neets - if I finished employment at the end of August, but my Holiday Pay took me through to mid-September, but then in early September the employer paid out bonuses for the previous year - would I be entitled to the bonus, or not (because I have resigned)? I handed in my resignation around early August (from memory - it was a few years ago).


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  Reply # 529463 5-Oct-2011 11:21 Send private message

trig42:
bener: So, Neets, if I have been at my position for less than a year and I was to resign, I would be only paid out the accrued hours at 8% of the total value - e.g. if I had two weeks leave accrued I would be paid 8% of my normal fortnightly pay?



No. You would be paid 8% of what you have earned since you started there. (8% of annual wage ~ 4 weeks pay if you worked a whole year). You would be taxed on this at your normal rate and maybe other adjustments, you would also recieve payment for any Days in Lieu that are owing to you (if you worked a public holiday and did not take another day off in compensation the payroll system should still have that there for you)  


Ah that makes sense, thanks for the explanation - I though that sounded a bit harsh, the way I read it!




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  Reply # 529470 5-Oct-2011 11:28 Send private message

keewee01: Neets - if I finished employment at the end of August, but my Holiday Pay took me through to mid-September, but then in early September the employer paid out bonuses for the previous year - would I be entitled to the bonus, or not (because I have resigned)? I handed in my resignation around early August (from memory - it was a few years ago).



Hi there, bonuses are difficult.  You'll need to review your employement contract. Some companies pay out bonsues based on profitability of the company and therefore they're not a given.  Other companies the bonus is part of your total Remuneration package.  There's no clear cut answer when it comes to bonuses, it's down to your employement contract, or good will of your employer if it's not clear.  I'd definately ask about it if your contract doesn't state when it's due and the period it covers. 




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  Reply # 529473 5-Oct-2011 11:32 Send private message

bener:
trig42:
bener: So, Neets, if I have been at my position for less than a year and I was to resign, I would be only paid out the accrued hours at 8% of the total value - e.g. if I had two weeks leave accrued I would be paid 8% of my normal fortnightly pay?



No. You would be paid 8% of what you have earned since you started there. (8% of annual wage ~ 4 weeks pay if you worked a whole year). You would be taxed on this at your normal rate and maybe other adjustments, you would also recieve payment for any Days in Lieu that are owing to you (if you worked a public holiday and did not take another day off in compensation the payroll system should still have that there for you)  


Ah that makes sense, thanks for the explanation - I though that sounded a bit harsh, the way I read it!


Sorry if I didn't explain it very clearly.  The gross earnings for the current Annual Leave year is what the 8% is calculated on.  If you earnt a salary/wage of $1,000 a week and had worked 30 weeks, then your Gross earnings would be $30,000.  Your holiday pay for the current Annual Leave year would be calculated as $30,000 x 8% = $2,400.00




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