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Annual Holiday Entitlements

Section 16
Entitlement to annual holidays
  • After the end of each completed 12 months of continuous employment, an employee is entitled to not less than 4 weeks' paid annual holidays. Section 16(1)
  • An employee's entitlement to annual holidays remains in force until the employee has taken all of the entitlement as paid holidays. Section 16(4)


Section 17
How employee's entitlement to annual holidays may be met
  • An employer and employee may agree on how an employee's entitlement to 4 weeks' annual holidays is to be met based on what genuinely constitutes a working week for the employee. Section 17(1)
  • If an employer and employee cannot agree on how an employee's entitlement to 4 weeks' annual holidays is to be met, a Labour Inspector may determine the matter for them. Section 17(2)


Section 18
Taking of annual holidays
  • An employer must allow an employee to take annual holidays within 12 months after the date on which the employee's entitlement to the holidays arose. Section 18(1)
  • If an employee elects to do so, the employer must allow the employee to take at least 2 weeks of his or her annual holidays entitlement in a continuous period. Section 18(2)
  • When annual holidays are to be taken by the employee is to be agreed between the employer and employee. Section 18(3)
  • An employer must not unreasonably withhold consent to an employee's request to take annual holidays. Section 18(4)


Section 19
When employee may be required to take annual holidays
  • An employer may insist an employee take annual holidays if

(a) the employer and employee are unable to reach agreement as to when the employee will take his or her annual holidays; or

(b) section 32 (which relates to closedown periods) applies.

  • An employer must give the employee not less than 14 days' notice of the requirement to take the annual holidays.


Section 20
Employer may allow employee to take annual holidays in advance
  • An employer may allow an employee to take an agreed portion of the employee's annual holidays entitlement in advance. Section 20


Section 28
When annual holiday pay may be paid with employee's pay
  • For casual employees, an employer may pay holiday pay each pay period. Section 28
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My employee usually works 2 days a week. What is their annual holiday entitlement?

  • Your employee is entitled to 8 days paid holidays a year.
  • That is, the 4 weeks provided by Section 16(1) based on 2 days a week Section 17(1).
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My employee has only worked for me for a few months, and is demanding a few days of paid holidays. Am I required to allow this?

  • No, you are not.
  • An entitlement to annual holidays only arises after a full year's employment. Section 16(1)
  • You can however agree to allow the employee some paid holidays in advance, but it is your choice, and not the employee's. Section 20
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My accountant has asked me to pay out all leave owing on the 31st March each year, in order to bring holiday pay into the books, and keep things tidy. Should I do it?

  • This is not required under the Act.
  • Paying a sum of money to each of your employees does not satisfy any part of your obligation under the Act, which is to provide each employee with 4 weeks paid holidays a year.
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I have an employee who refuses to take holidays, and has built up a large entitlement over the years. Can I insist they take a holiday?

  • Yes you can.
  • This exact scenario is provided for by Section 19.
  • If you and your employee are unable to reach agreement, all you have to do is give the employee 14 days notice that they are taking leave.

More on public holidays

Public Holiday Entitlements
Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more..
Public Holiday Taken
Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more..
Public Holiday Worked
Use this method for an employee who works at any time on a public holiday more..
Public Holiday Calendar
A facility in Ace Payroll to check when public holidays fall in this and future years more..
Christmas and New Year 2016/2017
Working out public holiday entitlements during the 2016/2017 Christmas and New Year holiday period more..
Easter Sunday
Easter Sunday is not a public holiday, but shops cannot open more..
Easter Holidays 2016
The dates of Good Friday and Easter Monday this year more..
Waitangi Day
Waitangi Day commemorates the signing of a treaty at Waitangi on 6 February 1840 more..
Anzac Day
Anzac Day is held on 25 April each year to commemorate New Zealanders killed in war more..
Queen's Birthday
The Queen's Birthday is always observed in New Zealand on the first Monday in June more..
Labour Day
Labour Day is always observed on the 4th Monday in October more..
Southland Anniversary Day
Southland Anniversary Day is always on Easter Tuesday more..
Default Provincial Anniversary Day
Select the provincial anniversary day observed by the majority of your employees to make it the default more..
Payment For Sick Leave If Taken On A Public Holiday
You are not required to pay your staff time and a half if they call in sick on a public holiday they would have otherwise worked more..
Alphabetical Index
The Ace Payroll alphabetical index provides links to all documentation more..
Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more..

More on holiday pays

Cashing Up Holiday Pay
From 1st April 2011 it is legal for an employee to cash up to one weeks annual leave each year more..
Understanding Termination Accruals
Handling of accrued holiday pay upon termination can be confusing. Ace Payroll explains the concept of accruals and demonstrates how termination pay is calculated more..
Holiday 52 Week History
It is not absolutely necessary to enter a full 52 week earnings history for correct holiday pay calculation more..
Holiday Pay - Daily Rates
An explanation of the calculation of a daily rate for an employee taking holidays after a full years service more..
Leave Calendar
Use the leave calendar to record actual dates taken for leave more..
Employee Leave Profile
The employee leave profile records which are the normal days worked by an employee more..
Casual Holiday Each Pay
This tutorial shows how to have Ace Payroll automatically pay a casual employee 8% holiday pay every time they are paid more..
Taxation of Holiday Pay
This article shows how easy it is to tax holiday pay according to IRD requirements more..
Annual Compulsory Closedowns
An annual compulsory closedown is where a business traditionally closes down for a number of weeks each year, usually over Christmas more..
Changing Holiday From 8% Each Pay
The procedure for changing a casual employee over to being a permanent employee in Ace Payroll for holiday pay purposes more..
Termination Holiday 8% Part Year Payment
How to pay the 8% of part year gross for an employee who has been employed for more than a year, receives four weeks holidays a year, and is terminating their employment more..
ERS Holiday Pay FAQ's
A selection of holiday pay FAQ's from the Employment Relations Service more..
Holidays 4 to 5 Weeks
How to manually change an employee from 4 to 5 weeks annual leave more..
Holiday Pay Miscellaneous
The reason why only full days holiday pay owing is shown on payslips rather than fractional days more..
Alphabetical Index
The Ace Payroll alphabetical index provides links to all documentation more..
Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more..

Other leave sections

Public Holiday Entitlements
Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more..
Public Holiday Taken
Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more..
Public Holiday Worked
Use this method for an employee who works at any time on a public holiday more..
Alternative Holidays
An Alternative Holiday is a day an employee is entitled to take off as paid leave, in return for having worked on a public holiday more..
Annual Holiday Entitlements
This article looks at entitlements to holidays as provided for by the Holidays Act more..
Annual Holiday Payments
This tutorial shows how to record holiday pay taken using the Annual Leave method more..
Sick Leave
Entitlements to sick leave as provided for by the Holidays Act more..
Bereavement Leave
Entitlements to bereavement leave as provided for by the Holidays Act more..
Time Bank
The time bank feature allows for the accumulation of hourly leave outside the legal requirements of the Holidays Act more..
Irregular Work Pattern
In this article we look at the calculation of Relevant Daily Pay for an employee that works irregular hours more..
Leave Owing Report
The Leave Owing report provides an estimate of holiday pay owing to all staff at a selected date more..
Holidays Act 2003
The full text of the Holidays Act 2003 more..
Alphabetical Index
The Ace Payroll alphabetical index provides links to all documentation more..
Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more..