What this calculator covers
Annual holidays being taken after an entitlement has arisen, or leave in advance where the same OWP-versus-AWE comparison applies. The result is gross pay before payroll deductions.
New Zealand annual holiday pay
Holiday pay calculator NZ
Compare Ordinary Weekly Pay with Average Weekly Earnings, use the higher weekly rate and estimate gross pay for the annual leave you plan to take.
Estimated gross holiday pay
$950.00
for 5 leave days, before deductions
Normal weekly pay (OWP)
$950.00
Earnings average (AWE)
$937.50
Higher figure used
Your normal weekly pay
Pay rate for one leave week
$950.00
- Normal weekly pay
- $950.00
- Average weekly earnings
- $937.50
- Difference per week
- $12.50
- Leave entered
- 5 days (1 weeks)
This is an estimate for annual holidays being taken. It does not calculate pay-as-you-go holiday pay, cashing up leave, public-holiday pay or a complete final pay.
Current law: This calculator follows the Holidays Act method that applies now. Employment New Zealand says the Employment Leave Act will replace these rules in August 2028.
Why two weekly amounts are compared
Ordinary Weekly Pay reflects an ordinary week now. Average Weekly Earnings looks back over the applicable earnings period. Annual holiday pay uses at least the greater amount.
When the four-week formula helps
If OWP cannot be identified directly, relevant gross earnings over the previous four weeks are reduced by excluded irregular payments and divided by four.
What this calculator does not cover
It does not calculate final pay, valid 8% pay-as-you-go arrangements, cashed-up leave, public-holiday pay, sick leave or Average Daily Pay.
See the calculation
Holiday pay worked example
This example follows Employment New Zealand’s Sione scenario for one week of annual holidays.
- 1
Ordinary weekly pay
$3,687.50 ÷ 4 weeks
$921.88
- 2
Average weekly earnings
$48,750 ÷ 52 weeks
$937.50
- 3
Compare the two rates
Use the greater amount
$937.50
- 4
Pay for one week of leave
$937.50 × 1 week
$937.50 gross
Average weekly earnings are $15.62 higher, so that is the minimum weekly rate used in this example. Actual payroll still needs to confirm the included earnings and leave portion.
How annual holiday pay is calculated in NZ
At the beginning of the annual holiday, payroll calculates Ordinary Weekly Pay and Average Weekly Earnings. The agreed portion of annual holidays must be paid using a rate based on whichever weekly amount is greater.
Holiday pay formulas used by this calculator
Ordinary Weekly Pay formula
(previous 4 weeks’ gross earnings − excluded payments) ÷ 4
Average Weekly Earnings
gross earnings for the applicable period ÷ weeks in that period
Weekly holiday pay rate
the greater of OWP and AWE
Estimated holiday pay
weekly holiday pay rate × annual-leave weeks taken
Converting annual leave days into weeks
Annual holidays are an entitlement measured in weeks. When a stable five-day working week applies, one day is commonly one-fifth of a week, so two days is 0.4 weeks. A changing roster, different-length days or an alternative way of expressing the entitlement may require payroll to agree and calculate the portion differently.
Check the earnings before trusting the answer
Include regular OWP payments
Regular wages or salary, allowances, overtime and productivity or commission payments may form part of an ordinary week.
Remove genuinely irregular amounts
One-off or irregular payments and other excluded amounts should not remain in the four-week OWP formula.
Use Holidays Act gross earnings for AWE
Do not assume a generic taxable-income total always matches the gross earnings required for annual holiday pay.
Calculate when the holiday starts
OWP and AWE are calculated at the beginning of the annual holiday, using the relevant completed pay-period information.
Why 8% is not the normal annual-leave calculation
Pay-as-you-go holiday pay is allowed only in specified circumstances and must meet the legal requirements. Final pay can also contain an 8% calculation for a different period, alongside entitled leave and other checks. This page deliberately does not turn every annual holiday into 8% of earnings.
If employment is ending, use the employer’s complete final-pay calculation rather than treating this annual-leave estimate as the amount due.
Official annual holiday pay sources
The formulas and limitations on this page were checked against Employment New Zealand and the Holidays Act. Employment records and individual arrangements can change which earnings and leave portion apply.
Employment New Zealand — annual holiday payEmployment New Zealand — calculating holiday and leave payNew Zealand Legislation — Holidays Act 2003, section 21
Last reviewed 12 October 2026. This is general information, not payroll or legal advice.
Holiday pay calculator FAQs
How is annual leave pay calculated in New Zealand?
For annual holidays that an employee is entitled to, the employer calculates ordinary weekly pay at the start of the holiday and average weekly earnings over the applicable review period. The annual holiday is paid using at least the greater weekly rate.
What is ordinary weekly pay?
Ordinary weekly pay is the amount normally received for an ordinary working week, including regular payments connected with the work. If it cannot be identified directly, the Holidays Act provides a formula based on relevant earnings over the previous four weeks.
What are average weekly earnings?
Average weekly earnings are normally the employee’s Holidays Act gross earnings for the 12 months before the end of the last pay period before the holiday, divided by 52. A shorter employment period uses its applicable whole or part weeks.
Does this calculator work for part of a week?
Yes. Enter the number of leave days and the days normally worked each week. The calculator converts them into a weekly portion. Confirm the portion with payroll when the work pattern varies.
Is annual holiday pay simply 8% of earnings?
No. The 8% method applies only in particular situations, including valid pay-as-you-go arrangements and parts of some final-pay calculations. Annual holidays being taken generally use the greater of ordinary weekly pay and average weekly earnings.
Can I use this calculator for final pay?
No. Final pay can include entitled annual holidays, a separate 8% calculation since the last anniversary, prior payments and a public-holiday check. This calculator covers annual holidays being taken, not a complete termination payment.
Are PAYE and other deductions included?
No. The result is gross annual holiday pay before PAYE, KiwiSaver, student-loan deductions or other payroll adjustments.
When do the new leave rules begin?
Employment New Zealand says the Employment Leave Act will replace the Holidays Act in August 2028. The current Holidays Act calculation continues to apply until the new rules start.
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