Pay as You Earn (PAYE) Leave (NZ)

Overview

You may elect to pay PAYE leave to employees who work irregularly or are on a fixed contract for less than 12 months in duration, in place of accruing Holiday Pay.

This is supported using a special leave category in the Astute system that allows you to see this as leave but includes it as part of their regular pay. This will display on an employee pay advice in the Earnings section under Other Entitlements.

Creating a PAYE Leave Category

To create a PAYE leave category:

1. Go to Config > Leave > Add New Leave Category > select a region > Create new Leave Category.

2. Enter the Leave Category Name (eg PAYE Leave) and a Common Name if this is required.

3. Tick the Enabled checkbox to make the leave category available to assign to employees.

4. Select Pay As You Earn (Do Not Accrue) as the Accrual Method.

5. Set the Reset Anniversary to No Reset.

6. Enter the Entitlement Percentage (ie the percentage amount that would generally be accrued as Holiday Pay, if this was accumulating for the employee).

7. Select the pay item used to pay the amount in the employee’s pay. You may like to create a specific pay item for ‘PAYE Leave’ for this purpose.

8. To show the amount on employee pay advices, ensure that the ‘Hide from Employee’ checkbox is not ticked.

9. Set a Display Order value, if required.

10. Select the pay items that should be included in the accrual calculation. If only certain pay items should be included in this calculation, deselect the ‘All Pay Items’ checkbox and then tick the pay items to include.

11. Click Save.

As PAYE Leave is paid out each period, it doesn’t accrue a balance and leave requests cannot be created for the leave category.

PAYE Leave isn’t recorded in the leave ledger as it isn’t accruing and spending. If you wish to see this leave, you can do this either in the Payroll Report or Pay Item Balance Report.