Holiday Pay Calculator (NZ)
Updated November 2026 · Free · No sign-up
Calculate NZ holiday pay — the Holidays Act’s two engines: 8% pay-as-you-go (genuine casuals/short fixed terms) and the greater of Ordinary Weekly Pay vs Average Weekly Earnings for annual leave.
Quick answer: NZ annual leave pays the GREATER of your Ordinary Weekly Pay (current normal week) or Average Weekly Earnings (gross last 12 months ÷ 52). Casuals on genuine PAYG instead receive 8% on every payslip. Final pay adds 8% on earnings since the last anniversary.
The Greater-Of Test (Holidays Act s21)
Each week of annual leave pays max(OWP, AWE): OWP = your current ordinary week (base + regular allowances/commission patterns); AWE = last-12-months gross ÷ 52. The design catches both directions — recent raises (OWP wins) and big-earning years with OT/commissions (AWE wins). Payroll systems paying flat salary for leave weeks systematically underpay variable earners — the Holidays Act remediation scandals (hundreds of millions across NZ employers, including government) came precisely from this.
Worked Examples
Example 1 — OT-heavy year. OWP $1,300, but $78,000 earned (AWE $1,500): leave pays $1,500/week — the overtime year lifts your holidays.
Example 2 — fresh raise. OWP $1,400 after a raise, AWE $1,250: leave pays $1,400 — the current week wins.
Example 3 — the 8% casual. Genuine casual earning $900 in a week: +$72 (8%) on the payslip, itemized — lawful only for genuinely intermittent work or sub-12-month fixed terms, by agreement.
Audit Your Own Leave Pay
Pull 12 months of gross (incl. OT, commissions, bonuses counted as gross earnings), compute AWE, compare against what leave weeks paid — underpayments from salary-only leave rates are claimable 6 years back, and MBIE’s remediation playbook is well-worn. Related: Mondayised public holidays and the final-pay 8% use the same earnings definitions.
Frequently Asked Questions
How is holiday pay calculated in NZ?
Annual leave weeks pay the GREATER of Ordinary Weekly Pay (current normal week) or Average Weekly Earnings (12-month gross ÷ 52) — the Holidays Act’s double test.
Who can be paid 8% holiday pay?
Genuine casuals (intermittent/irregular) and fixed terms under 12 months, by agreement, itemized on each payslip — misuse for regular staff is the classic violation.
Does overtime count in holiday pay?
Yes — OT and commissions enter gross earnings for AWE (and regular patterns enter OWP), lifting leave pay after heavy years.
Why were NZ employers in holiday-pay scandals?
Payroll systems paid flat salary for leave instead of the greater-of test — remediations ran to hundreds of millions; the same check works for your own payslips.
How far back can underpayments be claimed?
Six years — with MBIE’s labour inspectorate and ERA as the enforcement path.
✓ Formula verified • Last updated: November 3, 2026