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Leave: Setting Annual Holidays for a Permanent employees

Setting Annual Holidays for a Permanent employees

Permanent Employee (full time or part time)

These are the most common types of employees. Permanent employees have the full set of employment rights and responsibilities. They are entitled to four weeks of annual holidays (annual leave) after continuous employment for 12 months.

Employees have to meet certain criteria to qualify for some employment entitlements, such as parental leave, parental leave payments, annual  holidays, sick leave and bereavement leave. There may be small differences between full-time or part-time employees because of their work patterns. Please refer to Employment New Zealand for further clarification on these.

When you are ready to set up your permanent employee's Annual Holiday settings, proceed to the employee's profile page and select the 'Leave' tab.

1. Select the Method

Select method 'Rate set as per the Holidays Act'. The weeks of leave can be adjusted according to the individual contract offered to the employee. Some organisations offer employees 5-6 weeks of leave annually. The minimum according to the holidays act is 4 weeks of annual leave.

2. Length of a Standard Week

The default "set custom rate" will use hours in a typical week divided by days in a typical week to determine typical hours in a day i.e. 40 divided by 5 = 8 hours.  Whenever 8 hours is recorded in a timesheet for annual/sick leave, 1 day will be deducted from the employee's leave balance. This is good to use for variable hours over the week so that an average can be calculated for a day to be used as annual leave.

If the employee works set varied hours on different days, determined by their standard pay settings, choose "same as default standard week". For example, an employee's default standard hours are 8 hours Monday through Thursday, but 5 hours on a Friday. Using the same as default standard week settings means that a day of annual leave taken on a Monday will be 8 hours, but a Friday will be 5.

3. Days in a Typical Week

Number of days an employee would work in a typical week. This will determine how many days of holiday are allocated to them each year on their anniversary i.e. 5 days/week over a 4 week period = 20 days allocated each year. Make sure to change this field if the employee's typical week changes.

4. Hours in a Typical Week

Number of hours an employee works in a typical week. If the hours are varied enter the most they would work commonly each week.

5. Leave Anniversary

Typically this is your employee's start date. Do not enter a date in the future.

6. Set an Annual Leave Balance in Days

Enter any allocated annual leave that the employee has not taken as of now, prior to joining Thankyou Payroll. Be careful not to include any accrued leave. See Entering previous pay history for an employee

e.g. Employee Jemima has worked 5d/wk, for 2.5 years before you started with Thankyou Payroll. In that time she has taken 6 weeks of Annual Holidays:

2 years @ 4 weeks/year = 8 weeks (40 days). Subtract 6 weeks (30 days) and the remainder is 2 weeks (10 days). Set her day balance to: 10.

7. Date of the most recent addition of Leave

This is the last anniversary the employee was allocated leave before starting with Thankyou Payroll. If they are new employee the system will set this to be the same as their start date.

8. Alternative Leave (lieu days)

Any 'Lieu days' the employee has been allocated but not yet taken prior to joining Thankyou Payroll. Once you have started using Thankyou Payroll to process pays, any public holiday worked should have the alternative days added to the timesheet and not here. See How to enter public holidays.

Leave management tab in employee profile (illustration)