--- title: System-Recommended Annual Leave Settings based on Employee Agreement Type description: This article uses example scenarios to illustrate annual leave and holiday pay settings per employment type - from leave settings, timesheets, cost tracking and payslips, to leave liability. --- [Skip to content](https://help.thankyoupayroll.co.nz/en/set-up-annual-leave-per-employment-type#main-content) English Show submenu for translations [More support](https://help.thankyoupayroll.co.nz/en/kb-tickets/new?hsLang=en) ![TYP\_Logo-09-1.png\]](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/TYP_Logo-09-1.png?height=40&name=TYP_Logo-09-1.png) Open main navigation Close main navigation - English Show submenu for translations - [More support](https://help.thankyoupayroll.co.nz/en/kb-tickets/new) - [Visit our website www.thankyoupayroll.co.nz](https://www.thankyoupayroll.co.nz/) [Visit our website www.thankyoupayroll.co.nz](https://www.thankyoupayroll.co.nz/) Kia ora! How can we help you? - There are no suggestions because the search field is empty. 1. [Help Centre](https://help.thankyoupayroll.co.nz/en?hsLang=en) 2. [Everything Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en) 3. [Annual Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#annual-leave) # System-Recommended Annual Leave Settings based on Employee Agreement Type ## This article will take you through the annual leave process for different employees. Using an example scenario, you will be able to explore each step - from leave settings, adding leave to a timesheet, to payslips and leave liability. *Updated: May 2026* Employees are entitled to 'annual leave' or '8% of Gross pay as holiday pay' depending on their employment agreement. Employers are must to pay employees the correct amount for annual leave taken, accrued, or allocated - at the correct time.   ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png)If you are not 100% sure of your employee's employment type, we recommend that you contact [Employment New Zealand](https://www.employment.govt.nz/about/contact-us/) on **0800 20 90 20**, or give our friendly customer success team a call on **04 488 7531** so they can help guide you through this. Let's explore employee annual leave and 8% of Gross as holiday pay. --- ![Pro Tip - Blue Block](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Pro%20Tip%20-%20Blue%20Block.png?width=54&height=54&name=Pro%20Tip%20-%20Blue%20Block.png)The button you select in our system will display in a **darker colour**. This will help you to identify the settings chosen for an employee.   ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png)If you have a **regular closedown period** and you are setting up a new permanent employee, [please follow the instructions in this help article](https://help.thankyoupayroll.co.nz/en/employee-setup-for-annual-closedown?hsLang=en). --- To explore specific areas further, here are some useful links: - To find out more about the [Leave Tab of the Employee Profile, click here](https://help.thankyoupayroll.co.nz/en/understanding-leave-settings-tab-in-employee-profile?hsLang=en). - For a comprehensive walkthrough on interpreting the [Leave Liability Table, click here](https://help.thankyoupayroll.co.nz/en/understanding-leave-liability?hsLang=en). - To find out how to [set up a contractor in the Thankyou Payroll system, click here](https://help.thankyoupayroll.co.nz/en/adding-a-contractor-withholding-tax?hsLang=en). --- ![Did You Know - Green Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Did%20You%20Know%20-%20Green%20Block%20(1).png?width=52&height=52&name=Did%20You%20Know%20-%20Green%20Block%20(1).png)**Did you know** we have an article [explaining the different aspects of annual leave](https://help.thankyoupayroll.co.nz/en/explaining-how-annual-leave-works?hsLang=en) for each employment type? We also have a video explaining how annual leave works. 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