Convert an annual salary to an hourly rate, check against NZ minimum wage, and calculate holiday pay. For employees and employers.
Annual Leave and Holiday Pay in New Zealand
Under New Zealand's Holidays Act 2003, most employees are entitled to paid annual holidays, often called annual leave. This calculator helps you determine how much leave you have accrued and the monetary value of any holiday pay you might be owed, particularly when your employment ends.
How Annual Leave Accrues
After 12 months of continuous employment with the same employer, you qualify for your first "annual holidays." You are entitled to 4 weeks of paid leave. This entitlement is based on your ordinary working week. For example, if you work 5 days a week, 4 weeks equals 20 days of leave.
Before completing 12 months of service, you do not accrue any annual leave. Once you qualify, you continue to accrue 4 weeks of leave for each subsequent 12-month period of continuous employment. If your employment ends part-way through a year after qualifying, your leave is calculated on a pro-rata basis for the portion of the year you worked.
How Holiday Pay is Calculated
When you take annual leave, or when it is paid out upon termination, the amount you receive is called "holiday pay." The law requires your employer to pay you the greater of two amounts:
- Your ordinary weekly pay (your regular pay based on your agreed hours and rate), or
- Your average weekly earnings over the last 52 weeks.
This daily rate is then multiplied by the number of leave days you are taking or being paid out.
Different Rules for Short-Term or Casual Work
If you are on a fixed-term agreement for less than 12 months, or if you are a casual employee with no regular work pattern, and you have not completed 12 months of service, different rules apply. You are generally entitled to 8% of your gross earnings as holiday pay. This can be paid as part of your regular pay ("pay-as-you-go") or as a lump sum when your employment ends. If it is paid as-you-go, you are not owed an additional lump sum. Once you complete 12 months of continuous service, even on a fixed-term or casual basis, you become entitled to annual holidays instead of the 8% payment.
Example Calculation
Maria started a permanent job on 1 July 2024, working 40 hours over 5 days a week for $30 per hour. On 30 June 2026, she has completed 2 full years of service (from 1 July 2024 to 30 June 2026). She has taken 10 days of leave. Her gross earnings for the last 52 weeks were $62,400.
- She qualified for her first 4 weeks after 12 months (on 1 July 2025).
- Her total entitlement for two completed years is 2 * 4 weeks * 5 days = 40 days.
- Her leave balance is 40 days - 10 days taken = 30 days.
- Her ordinary weekly pay is $30 * 40 hours = $1,200.
- Her average weekly earnings are $62,400 / 52 = $1,200.
- Her relevant daily pay is $1,200 / 5 = $240.
- The value of her leave balance is 30 days * $240 = $7,200.
This $7,200 is the holiday pay she would be owed if her employment ended on that date.
What to Do With This Information
Use this calculator to check your entitlements during employment or to verify your final pay. If you are preparing a new employment agreement or finalizing a termination, you can use the results to ensure the correct clauses or payout amounts are documented.
For a formal record of your employment terms, an Individual Employment Agreement is essential. When employment ends, a Letter of Termination of Employment should clearly state the final pay details, including any holiday pay payout calculated here.