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If you've set up leave for your employees, you can pay them leave when you do a pay run. The process for doing this is different in Australia and New Zealand, as shown below.

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Unpaid leave

If entering unpaid leave when completing the employee's pay run, reduce their normal hours by the number of hours of unpaid leave. This ensure's they're not overpaid.

Learn more about unpaid leave.

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titleEntering leave on a pay run (Australia)

Entering leave on a pay run (Australia)

When completing the employee's pay run, if an employee is entitled to paid leave, additional lines will be available on the payslip for entering the number of hours of leave taken. The employee’s available leave balances are also shown.

To pay leave, just enter the number of hours of personal leave and/or annual leave the employee has taken during the pay period.

annual and personal leave fields on the pay run

Adjusting normal hours for leave taken

Remember - when an employee is on leave they're not working normal hours. So if an employee usually works 40 hours per week, but takes 8 hours annual leave, they've only worked 32 normal hours.

When processing a pay which includes leave taken, adjust the Normal hours to exclude leave taken.

Here's the example where 40 hours of Normal pay is reduced to 32 hours because 8 hours was taken as annual leave. This ensures their total hours remains the same (in this case, 40 hours).

annual leave and normal hours highlighted on pay

Negative leave balances

If employee takes more paid leave than they're entitled to, their leave balance will become negative. However, they'll still be paid for all the leave entered on the pay run.

negative annual leave available

Leave pay rate

Leave is paid at the employee’s normal hourly pay rate. So, if an employee normally receives $25 per hour, they will be paid $25 for each hour of leave taken.

Leave loading

Some federal and state awards provide for annual leave loading for employees taking annual leave. See Leave loading for information on setting this up.

Public holidays

If an employee is entitled to paid public holidays, these days can be processed on their pay like any other paid workday. This means if an employee takes 5 days off work (4 days as annual leave and 1 day for a public holiday), simply process a regular pay with 4 days annual leave.

Learn more about public holidays on the Fairwork website

If you want public holidays to be shown separately on an employee's pay, set up a new earning pay item based on the employee's regular hourly rate. Here's an example.

example setup for public holiday pay item

You can then enter the number of public holiday hours on the employee's pay. Remember to reduce their normal hours to exclude the hours that were taken as a public holiday.

Here's an example 40 hour pay which includes 4 regular days (32 hours) and 1 public holiday (8 hours).

pay with 8 hours entered against public holiday earning

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titleEntering leave and holiday pay on a pay run (New Zealand)

Entering leave and holiday pay on a pay run (New Zealand)

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Need more help? Check out our free Payroll webcast and let an MYOB expert explain what you need to do.

There are six different types of holiday and leave pay you can include in an employee’s pay:

  • Annual leave—pay your employee’s holiday pay.
  • Sick leave—pay your employee for days not worked due to illness.
  • Alternative holiday—pay your employee for a day off that they’ve taken in exchange for working on a public holiday.
  • Public holiday—pay your employee for a public holiday they didn’t work.
  • Public holiday worked—pay your employee for working on a public holiday.
  • Final pay—pay all owed entitlements to an employee who is leaving your employment. Learn more about processing a final pay.

When you pay leave, the Normal hours amount is used for annual leave calculations. The Days being paid this period amount is used for bereavement leave, alternative holidays, public holidays, public holidays worked and sick leave calculations. The Days being paid this period includes all days being paid, including normal days worked and any paid leave taken. Learn more about Leave calculations.

Adding leave to the pay run

When completing the employee's pay run, add holiday pay or leave by clicking Add holidays or leave on the pay run screen for each employee when you’re processing their pay.

  1. Click Add holidays or leave.
  2. On the Holidays & leave popup window, click the type of leave you want to include in the employee’s pay.
  3. In the calculation popup window, specify the details of the leave. If necessary, you can make any required changes to the amounts in the calculations, or enter additional data to make sure the employee is paid the correct amount. For more information,

    including how to handle

    see Leave calculations.

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    Paying leave which spans multiple pay periods

    , see 

    If the employee's daily rate drops from the first period of paid leave, you'll need to change their pay rate to match. For all the details, see Leave calculations.

  4. Click Save to return to the Pay run page where the leave is now included.
  5. Repeat from step 1 for any additional types of leave, or if you need to add more of this leave type at a different rate.

You can add as many different lines of each type of leave as you want. If you need to pay a particular type of leave at more than one rate (for example, if you need to pay sick leave for a Sunday and a Monday, where the employee usually receives a higher rate for working on Sunday), you need to add an additional line of leave to the payslip for each pay rate by clicking Add holidays or leave again, and choosing an appropriate calculation to give them the different rate required.

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The Days being paid this period includes all days being paid, including normal days worked and any paid leave taken.

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titleRelated topics

Set up leave

Leave calculations

Leave loading (Australia only)

Managing your employees’ leave

Unpaid leave

Paid parental leave (Australia)

Paid parental leave (New Zealand)

Rostered days off (RDOs)

Time off in lieu

Long service leave

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