Holiday pay calculator
Check what you should be paid for annual leave, or the 8% holiday pay due when you are paid as you go or leave a job.
| Ordinary weekly pay | $1,200.00 |
| Average weekly earnings (12 months ÷ 52) | $1,230.77 |
| Rate used (the higher one) | $1,230.77 |
| Holiday pay | $2,461.54 |
The two ways holiday pay is calculated
- Taking annual leave: you are paid the greater of your ordinary weekly pay and your average weekly earnings over the last 12 months (gross earnings ÷ 52).
- Pay as you go or on leaving: 8% of gross earnings. This applies to fixed-term work under 12 months or irregular work where your agreement says so, and to leave you are owed when a job ends.
All employees are entitled to 4 weeks of paid annual holidays after 12 months of continuous work. 8% of a year’s earnings is roughly 4 weeks of pay, which is why the two methods line up.
Examples
| Ordinary weekly pay | Earnings in last 12 months | Rate used per week | 2 weeks’ leave |
|---|---|---|---|
| $1,000 | $52,000 | $1,000.00 | $2,000.00 |
| $1,000 | $60,000 | $1,153.85 | $2,307.69 |
| $1,500 | $70,000 | $1,500.00 | $3,000.00 |
| $800 | $48,000 | $923.08 | $1,846.15 |
8% at common earnings
| Gross earnings | Holiday pay at 8% |
|---|---|
| $5,000 | $400.00 |
| $10,000 | $800.00 |
| $20,000 | $1,600.00 |
| $40,000 | $3,200.00 |
What counts as gross earnings
Gross earnings include wages, overtime, commission, productivity bonuses and earlier holiday pay. They leave out discretionary bonuses, reimbursed expenses and redundancy pay. Holiday pay is taxed as ordinary income, and your employer may spread it across pay periods so it is not over-taxed.
The Employment Leave Act 2026 replaces the Holidays Act on 6 August 2028, moving to leave earned by hours worked. Until then the current rules apply, and employers cannot switch early.
New Zealand has no statutory redundancy pay, so any redundancy compensation comes only from your employment agreement. Holiday pay owed on leaving is due whatever the reason the job ended.
Common questions
How is 8% holiday pay calculated?
Multiply your gross earnings by 8%. On $20,000 of earnings that is $1,600.00, added on top of your pay.
Which is used, ordinary pay or average earnings?
Whichever is higher. If your ordinary weekly pay is $1,000 but you earned $60,000 in the last year with overtime, your average is $1,153.85 a week and that is what you get.
Is holiday pay taxed?
Yes. It is taxed through PAYE like normal pay. A large lump sum on leaving may be taxed using the extra pay rules.
Is there redundancy pay in New Zealand?
Not by law. Redundancy pay depends on your employment agreement, but notice and holiday pay are still owed.
Sources
- Employment New Zealand: Annual holidays
- Holidays Act 2003
- Employment New Zealand: Employment Leave Act 2026
Checked 28 September 2026. OneCalcs is independent and not affiliated with Inland Revenue, Employment New Zealand, ACC or any government agency.