HR Practice For Payroll Practitioners
HR Practice for Payroll Practitioners
Using the previous example calculation, the employee would get:
Time period:
No. of years:
Rate per year
Amount to be paid:
4 weeks for the first year employed 2 weeks for any subsequent year
1
$4000.00
$4000
19
$2000.00
$38000
20
$42000
Capped redundancy Compensation
A variation of redundancy compensation that may be seen is where the payment is capped in the agreement. This means a limit is set on the time the redundancy compensation payment covers.
Example 3:
• 4 weeks for the first year employed • 2 weeks for any subsequent year (capped at eight weeks) • Paid at the employee's ordinary rate of pay So, the employee can get 12 weeks of compensation that covers an employee who has been employed up to a maximum of five years (even if they have been employed for 20 years).
© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12
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