This help guide will explain how to access and configure various leave settings, including information on setting opening leave balances, Holiday Pay settings, how employees accrue leave, how we calculate leave, default leave types, and more.

To get started, we recommend configuring the general leave settings in your account. To do so, navigate to Settings > Leave > Default Leave Behaviour. You will see the option to configure the following settings:

For a more detailed explanation of each setting, see our help guide: Configuring Tanda’s Organisational Settings.

To determine which leave types are configured for a particular employee, navigate to Payroll > Staff and refer to the ‘Leave Types’ row in the table, as shown below.

By default, permanent employees (i.e. salaried, full-time, or part-time) are initially set up with four different leave types: Annual Holidays, Sick Leave, Bereavement Leave, Alternate Holiday.

To view and manage these leave types, navigate to an employee’s profile, then select Payroll > Leave. For example:

From this view, you can add new leave types using the + ADD button. You can also manage your employees' opening leave balances and set their next leave anniversary, which we will discuss in the following section.

If you are transferring to Tanda Payroll from another software provider, your employees will most likely not start with zeroed-out leave balances; instead, their existing accrued leave balances will transfer over.

To reflect this, simply set your employees' opening leave balances. To do so, navigate to an employee’s profile, then select Payroll > Leave. Next, click on a leave type, and you should see the following screen:

Then, input the appropriate opening balance and next leave anniversary date in the fields, and click UPDATE to save your changes.

Note that employees will automatically accrue four weeks of Annual Leave on their 12-month anniversary and then every 12 months after that, and 10 days of Sick Leave on their six-month anniversary and then every 12 months after that. This is what the "Next Leave Anniversary" date field refers to.

You will also need to configure your employees' Holiday Pay Settings. In New Zealand, employees become eligible for four weeks of paid annual leave after 12 months of continuous employment, and then every 12 months after. In the interim, employees accrue Holiday Pay.

Specifically, Holiday Pay accrues every Pay Period as 8% of the employee’s gross earnings. In certain exceptional circumstances, which you can read about here, this figure might be slightly higher or lower than 8%, though that is the standard in the majority of cases.

For example, suppose an employee works "so intermittently or irregularly that it is impractical for the employer to provide the employee with 4 weeks' of annual leave", or the employee is hired on a fixed-term contract of less than 12 months. In that case, the employee can agree to be paid their holiday pay on a 'pay-as-you-go' basis. In that situation, 8% of the employee's total earnings each pay period will be paid as Holiday Pay, along with their regular pay. This is what the below setting' holiday pay as you go' refers to.

Otherwise, in most permanent employment situations, this Holiday Pay balance will be paid out if the employee quits or is fired before reaching 12 months of continuous employment. After reaching 12 months of continuous employment, the balance zeros out and resets, with the four weeks of Annual Leave becoming available to be claimed instead, and the cycle restarting for the next 12-month period.

To quickly confirm whether your staff have their Holiday Pay settings configured, refer to the table found in Payroll > Staff.

If an employee doesn’t have a Holiday Pay Setting configured, you can remedy this by navigating to their staff profile and selecting Payroll > Leave. Then, locate the ‘Holiday Pay Settings’ heading and click +Add.

Next, input the appropriate information as prompted, including the holiday pay percentage (in almost all circumstances, this will be 8%), whether this is a pay-as-you-go agreement, and the holiday pay starting balance. Click CREATE to confirm your changes and configure these rules.

Employees accrue leave in the following ways, depending on the leave type:

Annual Holiday: After 12 months of continuous employment, employees are entitled to four weeks of annual holidays (annual leave).

Sick Leave: After six months of continuous employment, employees are entitled to 10 days of sick leave per year. This entitlement can be accrued and carried over, with a maximum accumulation of 20 days.

Bereavement Leave: After six months of continuous employment, you are entitled to a minimum of three days' bereavement leave if an immediate family member dies or you are involved in a miscarriage or stillbirth. If the deceased was not an immediate family member, you are entitled to one day of bereavement leave. For a full breakdown of bereavement leave entitlements, please see this guide.

Alternative Holiday: An alternative holiday (sometimes called a ‘day in lieu’) is a day off to take at another time. Employees get an alternative holiday when they work or are on call on a public holiday that falls on a normal working day for them. Regardless of how many hours they were at work or on call over the public holiday, they get a full day off for their alternative holiday.

Other: For all other leave types, including parental leave, family violence leave, jury service leave, and time off to vote, please refer to this Employment New Zealand leave accrual guide.

When employees apply for leave, we will fill out the request using days or parts of days if they only request certain hours off. However, when we export a leave request to the payslip, annual leave gets converted into weeks (or fractions of weeks).

If the employee has contracted weekly days set in their pay conditions, we will use that as the basis for what a week is. Otherwise, we will look at the recent pattern of work configured in the employee’s leave settings to figure out how many days a standard week is for that employee. Failing that, if this is their first timesheet and we have no recent work pattern to go off, we will look at how many days they have worked hours or leave in this current period and use that as the basis for what their standard week is. For example:

For instance, if, based on the above calculation, we determine an employee would typically work four days per week and has requested two days of annual holidays, we would calculate this as 0.5 weeks.

If an employee has been working four days a week on average for the last five weeks, and they take one day of annual holidays, we will export 0.25 weeks of leave taken to their payslip, and so on.

When an employee takes leave in New Zealand, the Holidays Act 2003 says you must pay them fairly based on how much they usually earn. But "fair" depends on several factors, including how often they work, whether they're on a salary or variable hours, and how much they've earned in the past year.

Our system follows the rules of the Holidays Act to automatically work out the correct payment using the best method for the situation. Depending on the kind of leave taken, we calculate the payment using one of the following methods:

Used for: Annual Holidays

How it works: We look at how much the employee has earned in the last 12 months and divide that by 52 (the number of weeks in a year), giving us a weekly average. This method is typically best for employees with variable earnings over time.

Used for: Annual Holidays

How it works: We check what the employee earned in the last four weeks (or the pay period, whichever is longer) and divide that by four to get an average per week. This method is best for employees who earn a consistent amount each week.

Used for:

How it works: We calculate what the employee would typically earn for a day’s work. Then:

This method simply gives the employee what they would’ve earned if they had worked that day.

Used for: When Normal Daily Pay can’t be worked out (e.g. variable hours).

How it works: We look at the employee's earnings over the last 12 months and divide it by the number of days they actually worked. This gives a fair daily average for people with irregular work patterns.

For some types of leave, the law says you must pay the higher amount if multiple calculation methods apply. Accordingly, our system checks all the available methods and automatically uses the one that pays the most, ensuring your employees always get what they’re entitled to.

If a particular leave type doesn’t support these automatic calculation methods, we’ll fall back to a manual calculation, so you can enter the amount yourself.