Calculating an employee's Average Daily Pay

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In most cases, when an employee takes public holidays, sick leave, alternative holidays or bereavement leave, they are paid their Relevant Daily Pay, which is basically the payment they otherwise would have received for that day.

In cases where the Relevant Daily Pay cannot be calculated, the Average Daily Pay calculation can be used instead. This calculation, introduced by the Holidays Amendment Act 2010, looks at the last 52 weeks' earnings and divides by the number of full or part days worked to calculate the Average Daily Pay for the employee. This calculation method is likely to be most useful for temp agencies, people working on piece rates, people with a variable work pattern, and companies with peak and off peak seasons among others.

The definition of Relevant Daily Pay is set out in Section 9 of the Holiday Act 2003.

The definition of Average Daily Pay is set out in Section 9A of the Holidays Act 2003.

To allow Ace Payroll to perform the Average Daily Pay calculation, you need to record the actual days paid for each week, so that over time 52 weeks' worth of data can be accumulated.

To activate days paid data accumulation

On the Calculate Pays screen, click Leave, then 52 Week Average.
Click Go to begin accumulating days paid data. When you first enable this option, the Days Paid This Pay window opens.
Enter the number of full or part days that the employee was paid in the current pay. For example, if the employee worked two days and was paid for three days holiday, you would record five days using this field.

To enter days paid for an employee

Once days paid data accumulation has been enabled, two Days Paid This Pay fields become available on the Calculate Pays screen, where you can enter the number of days paid in this pay and the number of days the employee is usually paid in a pay.
Click on these fields to open the Days Paid This Pay or Usual Days Paid This Pay window, where you can enter the days paid amount.

To pay leave using the 52 Week Average method

When paying public holidays, an alternative holiday, sick leave, or bereavement leave the Average Daily Pay method is available from the Select Payment Method wizard step.
Selecting Average Daily Pay opens the 52 Week Average Calculation calculator.