Payroll – Payment for Public Holidays After Termination

Did you know that in some cases, employees are entitled to be paid for public holidays after their employment has ended?

If you have an employee who has entitled leave owed upon termination – you need to extend that leave after their final day of work and determine if they are entitled for payment for any upcoming Public Holidays.

For example – there is an employee Danny, he works 5 days per week Mon-Fri and his last day of employment is Friday 21st January 2022. He has 13 Entitled Annual Leave Days owing.

Upon processing Final Pay for Danny, you would need to extend out past his ‘Final Day’ by the 13 days (not including any Public Holidays that fall in that time period), i.e.

  1. Monday 24th Jan, 2. Tuesday 25th Jan, 3. Wednesday 26th Jan, 4. Thursday 27th Jan, 5. Friday 28th Jan, 6. Tuesday 1st Feb, 7. Wednesday 2nd Feb, 8. Thursday 3rd Feb, 9. Friday 4th Feb, 10. Tuesday 8th Jan, 11. Wednesday 9th Feb, 12. Thursday 10th Feb, 13. Friday 11th Feb.

Monday 31st Jan (Auckland Anniversary Day) and Monday 7th Feb (Waitangi Day observed) are not included above as these are Public Holidays that fall in that timeframe, so Danny will be entitled to payment for the two days.

If you extend out the final day and no public holidays fall within the time period, then no extra payment is required.

If the employee does not have any Entitled Annual Leave or is only in their first year of employment – no extend of time is required.

The Small Business Training Hub is delivering training for Small Business Owners in February on Payroll Essentials – all you need to know as a Employer.  Check out the information on our website and come join us so you are not left in the dark when it comes to paying your staff.
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Information is correct at time of publishing and is of a general nature.  Professional advice from your business partners should be sought. 
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