NZ Payroll - PAYG Leave Maintenance

Some payees, such as those paid on a casual basis, may be eligible to be paid in lieu of annual leave on a pay-as-you-go basis every time they work. If there is a requirement to make such payments to any payees, PAYG leave payments must be configured under Portal > Pay > Maintenance > PAYG Leave. Once configured, PAYG leave payments are automatically calculated and payed to eligible payees at the PAYG Leave stage in pay batches.

To configure PAYG leave payments you must do the following:

• select a pay code against which the PAYG leave payment is to be made

• select the pay code group that defines the set of earnings based on which the PAYG leave payment is to be calculated

• optionally select the deductions that reduce the gross earnings based on which the PAYG leave payment is calculated (for more information, see Reduce Gross Earnings below)

• select the payee conditional variable and corresponding value that defines which payees are eligible to receive PAYG leave payments (for more information, see Payee Conditional Variable below)

• define the rate at which the PAYG leave payment is to be made, as a percentage of eligible earnings.

PAYG leave payments are validity period driven and therefore it is possible to define different sets of PAYG leave payment settings for different periods. The system applies the PAYG leave payment according to the settings that are valid on the pay period end date of a pay batch. Once a set of settings have been used in a pay batch, that set of settings is locked down to retain a consistent payment history and cannot be edited. If the rate of the leave payment or any other attributes need to be edited, a new validity period can be created and the settings can be updated as required.

Reducing Gross Earnings

The earnings based on which a PAYG leave payment is calculated may be based on gross earnings prior to any gross deductions. Alternatively, if the PAYG leave payment is to be calculated based on payees' gross earnings after specific gross deductions have been deducted from payees' gross earnings, it is possible to configure the PAYG leave payment settings such that the leave payment will be calculated based on payees' reduced gross earnings after certain gross deductions have been deducted from gross earnings.

Where the latter is the case, when configuring the PAYG leave payment you must select the deduction headers that represent the deduction types that are to reduced the gross earnings based on which the PAYG leave payment will be calculated.

Payee Conditional Variable

Payee conditional variables are used in the configuration of a PAYG leave payment to determine payees' eligibility to receive the payment at the PAYG Leave stage of a pay batch. For example, if you select a payee conditional variable called Employment Type and set its value to Casual, only those payees who have the Employment Type conditional variable on their Payee records set to a value of Casual will be eligible for the PAYG leave payment. 

Configuration Required Before Creating PAYG Leave Payments

The PAYG leave payment configuration uses a number of other maintenance items that must be configured beforehand. The maintenance items are:

• pay code against which the payment is made (Rates and Rules module)

• pay code groups (Pay module)

• deduction headers (Pay module)

• payee conditional variables (Portal Maintenance module).