27-01-2022

Payroll on public holidays

Public holidays can get confusing when it comes to paying your staff. We’ve got your back with some simple tips for small business owners to help you sort through all the complexities of holiday pay.
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With the new Matariki public holiday this year there are more public holidays than ever before – 11 to be exact (plus an anniversary day per region), so it’s really important to get a handle on all things Public Holiday payroll. Managing who’s doing what and what your responsibilities are as an employer is tricky, so we’re here to break it down and give you some handy tips that’ll make it heaps easier to pay your people right over a Public Holiday.

 

What we’ll cover:
  1. Common public holiday payroll definitions 
  2. Be prepared – a list of all the Public Holidays in 2022
  3. Common scenarios 
  4. Anniversary days – what's the difference?
  5. How Smartly can help

1. Common public holiday payroll definitions

 

Public holiday 

A day when an employee is entitled to a holiday if the public holiday falls on a day that the employee would have otherwise worked.

 
Anniversary Day

A day when an employee who resides in the provincial area is entitled to a public holiday. Anniversary days are generally observed on the Monday nearest to the actual day with some expectations.

 
Time and a half

Payment for work (such as overtime or holiday work) at one and a half times the worker's regular wage rate. When a public holiday falls on a day your employee would usually work, they’re entitled to a paid day off, no matter how long they’ve been working for you. If they agree to work anyway, you must:

  • pay them at least time and a half

  • give them an alternate public holiday

 
Alternate public holiday

An alternative day that an employee is legally entitled to have as a holiday if they worked on a public holiday that would otherwise be a working day for that employee. Sometimes referred to as a day in lieu. 

 
Statutory day taken

A day that an employee is entitled to and takes as a holiday if the public holiday falls on a day that the employee would have otherwise worked.

Source

2. Be prepared for public holidays in 2022

 

Mark them in your calendar

Check out when all the public holidays for 2022 fall and start preparing early for anything you need to sort with payroll. Even setting up reminders can make a huge difference. Find them all listed here.

NZ public holidays 2022
Decide if you will open

There are different options for businesses when operating over a public holiday. So, it’s good to make sure you know what you’re doing a few weeks prior so that you can let your staff (and customers) know. Especially if you are usually open and wanting to close for the day. 

Some businesses choose to add a surcharge when they open on public holidays to cover the additional costs from paying their staff time and a half. A 15% surcharge is commonly seen on public holidays especially in the hospitality industry.

 
Plan an alternative payday

All banks are closed on public holidays so if you usually process your pay on a public holiday, you will need to change the day you process this to ensure your staff get paid. It’s good practice to process the pay on the working day before your usual payday to make sure no one in your team will be left short for a day.

 
Check your staff’s employment types

Employees have different entitlements depending on their type of employment so it’s crucial to re-familiarise yourself with what contracts your employees are on and what your responsibility is when paying them their wages. 

Permanent employees, Casual employees and contractors

*Unless specified by employer

 

You can find more information about your employees’ rights on public holidays at Employment New Zealand.

3. Common scenarios

 

Scenario 1: 

 

The public holiday falls on a day when your business decides to open…

Scenario 1

 

Scenario 2: 

 

The public holiday falls on a day when your business is usually open but decides to close…

Scenario 2

 

Scenario 3: 

 

The public holiday falls on a weekend but your business hours are weekdays only. 

This means the public holiday is observed and will be “Mondayised”.

Scenario 3

Note: Waitangi Day falls on a weekend this year, check out our Christmas Payroll: Mondayised public holiday video to see more examples of this.

Scenario 4: 

 

An employee has decided to take leave on the public holiday…

Scenario 4

Smart tip: Smartly's payroll software can make this all a lot simpler, by automatically calculating public holidays into your employee's pay packets.

4. Anniversary days – what's the difference?

 

Generally, public holidays are recorded automatically in a payroll software like Smartly. However, regional anniversary days differ across the country, and these are often not automated so will need to be entered manually.

It’s good to mark them in your diaries especially to keep track of staff if they are across the country and will be entitled to different anniversary holidays. However, an employee is entitled to one anniversary day only if for example, the employee is based in Auckland and the business is based on Wellington. It can be negotiated which anniversary day the employee can take as public holiday.

NZ Regional Anniversary Dates 2022
For Employees who work on an anniversary day

 

Employees who work on an anniversary day are entitled to time and a half pay just like a public holiday. They also earn an alternate public holiday if it is their usual working day. 

Here is an example in Smartly that shows the pay packet of an employee who works 80 hours per fortnight, and who worked on Wellington’s Anniversary Day (24 Jan).  This employee gets paid time and a half for working on a public holiday, plus they earn another day’s leave as it is their usual working day. 

Employee works anniversary day example

Employees who work on an anniversary day but this is not their usual day of work, will still get time and a half pay but they will not earn an alternate public holiday.

For employees who take an anniversary day as leave, will need to be manually recorded as a statutory holiday taken in the payroll if it is their usual working day.

Here is an example in Smartly that shows the pay packet of an employee who works 80 hours per fortnight, and who took Wellington’s Anniversary Day as a public holiday:

Employee takes anniversary day as leave example

5. How Smartly can help.

 

For all types of employees, Smartly makes processing public holidays easier and accurate. We do the important parts for you so you can focus on running your business. For example, public holidays will automatically be pulled through in Smartly and calculated for your employees to save you time.

Payroll can be complex, we’re here to help make it simple. Smartly takes care of most of the faffing, but we also know that sometimes you just need to talk to someone. Our support team are always here to help. We offer free support and training to our customers. Sort your payroll with Smartly.

Payroll isn’t always straight forward, so if you're unsure, we suggest contacting MBIE on 0800 20 90 20.

 

Disclaimer: The content of this article is general in nature and is not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. We expressly disclaim any liability to you or your business in relation to the information contained in this article, and you rely on any information solely at your own risk.

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