Calculating holiday pay for casual employees can be confusing. This comprehensive guide explains your obligations under the Holidays Act 2003 and the two methods for managing holiday entitlements for casual staff.
Holiday Entitlements for Casual Employees
All employees in New Zealand, including casual staff, are entitled to:
Annual Leave (Annual Holidays)
- Amount: 4 weeks per year (8% of gross earnings)
- Accrual: Starts from day one of employment
- Payment: Either pay-as-you-go or accrual method
Public Holidays
- Amount: 12 public holidays per year in NZ
- If they work: Paid time-and-a-half plus alternative day
- If they don't work: Paid if it's an "otherwise working day"
Sick Leave
- Amount: 10 days per year
- Eligibility: After 6 months of employment
- Accrual: Can carry over up to 20 days
Bereavement Leave
- 3 days for immediate family
- 1 day for other bereavements
- Available immediately
Official Resource: Read the complete Holidays Act 2003 Guide from Employment New Zealand.
Two Methods for Annual Leave
Option 1: Pay-As-You-Go (8% Method)
Recommended for casual employees with irregular hours
How It Works:
- Add 8% of gross wages to each payslip
- Clearly labeled as "Holiday Pay" or "Annual Leave"
- Employee doesn't build up a leave balance
- Simpler administration for irregular workers
Example Calculation:
Scenario: Casual employee works 15 hours at $25/hour
- Gross wages: 15 × $25 = $375
- Holiday pay (8%): $375 × 0.08 = $30
- Total gross pay: $405
Best Practice: Pay-as-you-go is simpler for casual staff because they get their holiday entitlement with each pay, and you don't have to track leave balances.
Option 2: Accrual Method
Better for regular part-time employees
How It Works:
- Employee accrues 8% of earnings as a leave balance
- Can request paid time off from their balance
- Must track leave balance for each employee
- Must pay out accrued leave when employment ends
When to Use:
- Employee works regular, predictable hours
- You want to offer paid time off benefits
- Employee requests accrual method
Public Holidays for Casual Staff
If the Employee Works on a Public Holiday
- Pay them at least time-and-a-half (1.5× their normal rate)
- Give them an alternative day off (paid)
- This applies if it's an "otherwise working day" for them
If the Employee Doesn't Work
They get paid if:
- The public holiday falls on a day they would normally work
- It's an "otherwise working day" based on their work pattern
- They've been employed for at least 4 weeks
NZ Public Holidays 2025-2026
| Holiday | Date 2025 | Date 2026 |
|---|---|---|
| New Year's Day | 1 January | 1 January |
| Day after New Year's | 2 January | 2 January |
| Waitangi Day | 6 February | 6 February |
| Good Friday | 18 April | 3 April |
| Easter Monday | 21 April | 6 April |
| ANZAC Day | 25 April | 25 April (Observed 27 April) |
| Queen's Birthday | 2 June | 1 June |
| Matariki | 20 June | 10 July |
| Labour Day | 27 October | 26 October |
| Christmas Day | 25 December | 25 December |
| Boxing Day | 26 December | 26 December (Observed 28 December) |
Note: Regional anniversary days also apply based on location.
Final Pay When Employment Ends
If Using Pay-As-You-Go:
- No leave balance to pay out (already paid)
- Just pay final wages owed
- Final payslip within 2 working days
If Using Accrual Method:
- Must pay out all accrued annual leave
- Calculate using 8% of gross earnings
- Include in final pay
- Cannot withhold leave payments
Legal Requirement: You must pay all final wages and accrued leave within 2 working days of employment ending. Failure to do so can result in penalties and Employment Relations Authority claims.
Official Resources
- Annual Holidays Guide - Employment NZ
- Public Holidays Guide - Official dates and entitlements