Loading Pay History From Your Previous Payroll

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New Zealand's Holidays Act includes various calculations performed over a 12 month rolling window. This means that when you change between systems you may need to get a year's worth of historical data into the new system. However before you start on this, it's worth considering whether that historical data will provide any benefits, and whether it's needed for all or any of your employees.

(If your MYOB desktop payroll data has been loaded up to FlexiTime then your leave history will have already been loaded.)

The 12 month pay history is used in the calculation of an Average Pay Rate for annual leave. In many cases, this will be identical to the employee's standard pay rate, for example salaried employees. Also, where the leave accrual is based on actual hours worked rather than a fixed number of hours then the rate is likely to be the same as their standard rate - see this article for an example of this.

If an employee has variable pays, but have recently had a pay rise, then you might well find their standard rate is higher than their 12 month average, making a history load unnecessary. 

Annual leave is paid out at the higher of the Average (12 month) rate or the Ordinary rate. Where an ordinary rate cannot be determined the average over the last 4 weeks is used. In FlexiTime we separate the Standard Rate for the employee from the Ordinary (4 week average) rate.

In some cases the 4 week average will be higher than the 12 month average making the 12 month average unnecessary. The 4 week history will build up quickly in FlexiTime. 

 

The other use of the 12 month pay history is in the calculation of an average daily rate used in the payment of sick leave, public holidays, alternate days and bereavement. However the first value that should be used when paying these is the Relevant Daily Pay - what would have been paid to the employee had they worked that day. If they are on a roster, or have a contracted number of standard hours per day then that is what should be used. Only when their hours vary and it's not practicable to determine the employee’s relevant daily pay do you need to use the 12 month daily rate.

 

So the key times where loading a leave history is important are:

1) The employee has received a substantial amount of earnings through commission, bonuses or higher pay rates.

2) The employee's leave is based on a fixed number of hours per week but they are regularly paid for more hours.

3) The hours per day an employee works vary and you cannot determine what a relevant daily pay for an employee would be.

Details on how to load up the pay history can be found here.

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