data tool
Holiday pay calculator for New Zealand
New Zealand employees get 4 weeks of annual holidays after 12 months of continuous employment, paid at the greater of ordinary weekly pay and average weekly earnings, which is 12 months of gross earnings divided by 52. In a few cases holiday pay can be 8% of gross earnings paid with wages. This calculator works out both.
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- No watermark, no file limit
How it works
- 1
Choose how holiday pay is paid
Pick paid when leave is taken, or 8% paid with wages.
- 2
Enter the two measures
Type ordinary weekly pay and gross earnings over the last 12 months.
- 3
Enter the leave
Type the weeks of annual holiday taken, such as 1 or 2.
- 4
Read the result
The tiles show holiday pay, the weekly rate and both measures, with a note on which one won.
The greater of two measures
Annual holiday pay is the greater of ordinary weekly pay, what the employee usually earns in a week under the employment agreement including regular allowances and productivity payments, and average weekly earnings, one fifty second of gross earnings over the 12 months before the end of the last pay period before the holiday. For someone with steady pay the two are close. For someone who earned overtime or commission through the year, average weekly earnings is often higher, and that higher figure must be paid.
A worked example
An employee on ordinary weekly pay of $980 who earned $58,240 gross in the last 12 months has average weekly earnings of $1,120. The greater figure is $1,120, so a week of annual holiday pays $1,120, and two weeks pay $2,240. If the same employee had earned only $49,000, average weekly earnings would be about $942 and ordinary weekly pay of $980 would be used instead.
What goes into gross earnings
Gross earnings for average weekly earnings include salary or wages, allowances other than reimbursements, overtime, commission, productivity and incentive payments, and holiday pay already paid in the period. They leave out discretionary payments the employer is not bound to make, such as a one off gift, and reimbursements of expenses. Getting this figure right matters more than the arithmetic, because an understated gross earnings figure makes ordinary weekly pay look like the greater measure and underpays the holiday.
When 8% pay as you go is lawful
The Holidays Act lets holiday pay be paid as 8% of gross earnings with each pay only where the employee is on a fixed term of less than 12 months, or works so intermittently or irregularly that it is impractical to give proportionate annual holidays. It must be agreed in the employment agreement and shown as a separate amount on the payslip. Paying 8% to a permanent employee with regular hours to avoid giving leave is not allowed, and the employee can claim the leave as well.
Changes coming in 2028
Employment New Zealand has published guidance on changes to leave under new legislation that take effect in 2028, with resources for payroll providers, employers and employees to get ready. Until those changes apply, the Holidays Act 2003 governs annual holidays, and its rules are the ones in this calculator. The date checked sits under the calculator so the page can be reviewed when the new rules start.
Writing the agreement
An employment agreement states the annual holiday entitlement, how holiday pay is worked out and, where it is lawful, the 8% arrangement and why it applies. The AI document generator writes an employment agreement or a leave policy from a description; give it the employee's type of work and the holiday terms so the document says what this calculator applies.
Limits
- Law checked on 21 October 2026 against the Holidays Act 2003 and Employment New Zealand. This is arithmetic, not legal advice.
- Employment New Zealand lists changes to leave coming in 2028; until then the Holidays Act 2003 rules apply and are what this tool uses.
- No relevant daily pay for public holidays, no alternative holidays and no sick or bereavement leave.
- Gross earnings and ordinary weekly pay are the figures you type; working out what goes into each is the employer's job.
What it does not do
- It does not track leave balances.
- It does not check that an 8% arrangement is lawful for a particular employee.
- It does not store the figures.
Questions people ask
How is holiday pay calculated in NZ?
Holiday pay for annual holidays is the greater of ordinary weekly pay and average weekly earnings, multiplied by the weeks of leave. Average weekly earnings are gross earnings over the 12 months before the last pay period before the leave, divided by 52.
When can 8 per cent be paid with wages?
Only for employees on a fixed term of less than 12 months, or whose work is so intermittent or irregular that proportionate annual holidays are impractical. It must be in the employment agreement and appear as its own amount on each payslip.
What is average weekly earnings?
One fifty second of the employee's gross earnings for the 12 months immediately before the end of the last pay period before the holiday. Gross earnings include overtime, commission and most bonuses, so average weekly earnings capture pay that ordinary weekly pay leaves out.
When do I become entitled to annual holidays?
After 12 months of continuous employment with the same employer, all employees become entitled to at least 4 weeks of paid annual holidays. Before then an employer can agree to let you take leave in advance, and leaving before 12 months usually means 8% of gross earnings is paid out.
What happens to holiday pay when I leave?
Untaken annual holidays the employee is entitled to are paid out at the greater of ordinary weekly pay or average weekly earnings, and holiday pay for the period since the last entitlement date is paid at 8% of gross earnings for that period, less any holiday taken in advance.
Are public holidays part of the 4 weeks?
No. Public holidays are separate from annual holidays. An employee who would otherwise work on a public holiday gets the day off on relevant daily pay, or time and a half if they work plus an alternative day off in many cases. This calculator covers annual holidays only.
Write the employment agreement
Take what you made here into documents.
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Background reading: the question page on this.
Written and checked by the OneCraft team. Last checked .