Holidays Act 2003
Holiday pay calculator for NZ annual holidays
Holiday pay is not simply your normal week. On $1,500 ordinary weekly pay and $82,000 of gross earnings over the year, the law requires $1,577 a week, so two weeks of leave pays $3,154. Enter your figures to see which measure wins.
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Ordinary weekly pay versus average weekly earnings, five worked cases
Last updated
The same employee, five different earnings histories. In three of them average weekly earnings win, in two ordinary weekly pay wins. That is the whole point of the greater-of rule: neither measure is reliably higher.
Computed with this page's own formulas, for two weeks of annual holidays, with average weekly earnings taken as 12 months of gross earnings divided by 52. Figures are gross, before PAYE.
| Ordinary weekly pay | Gross earnings, 12 months | Average weekly earnings | Rate the law requires | Pay for 2 weeks' leave |
|---|---|---|---|---|
| $1,500 | $82,000 | $1,577 | $1,577 | $3,154 |
| $1,500 | $75,000 | $1,442 | $1,500 | $3,000 |
| $1,200 | $68,000 | $1,308 | $1,308 | $2,615 |
| $2,000 | $100,000 | $1,923 | $2,000 | $4,000 |
| $1,000 | $60,000 | $1,154 | $1,154 | $2,308 |
- An employee on $1,500 ordinary weekly pay who earned $82,000 over the year is legally owed $1,577 a week of annual holiday pay, a 5.1% uplift, because average weekly earnings are the higher of the two measures.
- The rule cuts both ways. On $75,000 of gross earnings the same $1,500 ordinary weekly pay is the higher figure, and two weeks of leave pays $3,000 rather than $2,885.
- The biggest gaps show up where overtime, commission or bonuses swelled the year's earnings: $1,000 ordinary weekly pay against $60,000 of gross earnings gives a legal rate of $1,154, a 15.4% uplift.
Cite this page
“Ordinary weekly pay versus average weekly earnings, five worked cases”, Holiday Pay Calculator NZ, https://holidaypaycalculator.co.nz/ (updated 2026-08-15). Computed with this page's own formulas, for two weeks of annual holidays, with average weekly earnings taken as 12 months of gross earnings divided by 52. Figures are gross, before PAYE.
Behind the numbers
- Employment New Zealand states that when an employee takes all or part of their annual holiday entitlement, their annual holiday pay is at least the greater of their ordinary weekly pay at the beginning of the holiday, or their average weekly earnings for the 12 months immediately before the end of the last pay period before the holiday is taken (Employment NZ).
- Average weekly earnings are gross earnings over the 12 months leading up to the last pay period, divided by 52. Where the employee has been employed for less than 12 months, Employment New Zealand says to count the whole or part weeks employed and divide gross earnings by that number instead, which is what the second field does.
- The ordinary weekly pay formula is (a minus b) divided by 4: take gross earnings for the 4 weeks before the end of the last pay period (a), deduct one-off, irregular or payments the employer is not bound to pay (b), and divide by 4. Employment New Zealand says employers must use this formula when ordinary weekly pay cannot otherwise be worked out.
- Ordinary weekly pay includes regular salary or wages, regular allowances such as a shift allowance, regular productivity or incentive payments including commission or piece rates, the cash value of board or lodgings, and regular overtime. It excludes irregular or one-off payments, discretionary payments, and employer contributions to superannuation schemes.
- The calculation is done once, at the start of the holiday, even where the leave spans more than one pay period. Employment New Zealand says a payroll system that recalculates mid-holiday and produces less than the start-of-holiday figure is not compliant.
- This calculator covers annual holidays only. Public holidays, alternative holidays, sick, bereavement and family violence leave use relevant daily pay or average daily pay instead, which are daily rather than weekly calculations (Employment NZ).
- The law stated here is the Holidays Act 2003 as Employment New Zealand states it today. Employment New Zealand says the Employment Leave Act replaces it on 6 August 2028 and that the current rules must be followed until then (Employment NZ).
Holiday Pay Calculator NZ is an independent information site operated by Ellul Solutions Ltd, with no affiliation to Employment New Zealand, the Ministry of Business, Innovation and Employment or the Labour Inspectorate. Nothing here is legal, employment or payroll advice. Holidays Act calculations turn on facts specific to each employee, so have yours confirmed by your payroll team or an employment lawyer before you rely on a figure.
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The questions we get
How is annual holiday pay calculated in New Zealand?
At least the greater of your ordinary weekly pay at the start of the holiday, or your average weekly earnings, which are gross earnings for the previous 12 months divided by 52. The employer must calculate both every time leave is taken.
What counts as ordinary weekly pay?
Regular salary or wages, regular allowances, regular productivity or incentive payments including commission and piece rates, the cash value of board or lodgings, and regular overtime. One-off payments, discretionary payments and employer superannuation contributions are excluded.
What if my earnings vary week to week?
Your employer must use the ordinary weekly pay formula: gross earnings for the last four weeks, less one-off or irregular payments, divided by four. That result is then compared with average weekly earnings and the greater is paid.
How much annual leave am I entitled to in New Zealand?
Four weeks of paid annual holidays after 12 months of continuous employment. The entitlement does not expire: it stays until you take it, cash up to one week of it, or leave and are paid out.
Is the 8% figure the same as annual holiday pay?
No. The 8% applies to pay-as-you-go arrangements and to the part-year component when employment ends. While you are employed and taking entitled leave, the greater of ordinary weekly pay and average weekly earnings applies instead.
Does this calculator cover public holidays?
No, deliberately. Public holidays, alternative holidays and sick, bereavement and family violence leave use relevant daily pay or average daily pay, which are daily calculations rather than the weekly one used for annual holidays.
Guides
Every figure sourced and dated.
Ordinary weekly pay vs average weekly earnings in New Zealand
The greater-of rule explained. What goes into ordinary weekly pay, how average weekly earnings are calculated, and when employers must use the four week formula.
Annual holiday entitlement in New Zealand: 4 weeks a year
When four weeks of annual holidays start, how the entitlement is worked out for varying work patterns, and what happens with leave in advance or unpaid leave.
Cashing up annual holidays in New Zealand: the one week limit
Employees can ask to cash up to one week of their four week entitlement each year. The limits, why leave cannot be saved and cashed up later, and the pay rate used.
Sources
Booking leave? Check the rate before payroll does.
Both measures compared, the greater applied, in under a minute.
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