Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Payment for Alternative Holiday

If an employee works on a public holiday that is an otherwise working day under the Holidays Act, they will receive an alternative holiday. On termination, any alternative holiday not used can be paid out so the employee will get the value of this day as part of their termination pay, along with it being part of the gross that the 8% on termination is calculated on.

The value of the alternative holiday paid out is based on the employee’s final day of employment as per Section 60(2)(b)(i).

Section 60. Payment for alternative holiday (1) An employer must pay an employee not less than the employee's relevant daily pay or average daily pay for the day which is taken as the alternative holiday. (2) Payment for an alternative holiday must be made — (a) in the pay that relates to the pay period in which the alternative holiday is taken; or (b) if the employee has not taken the alternative holiday before the date on which his or her employment ends, — (i) at the rate of the employee's relevant daily pay or average daily pay for his or her last day of employment; and (ii) in the pay that relates to the employee's final period of employment.

© New Zealand Payroll Practitioners Association, Mar 2026, Ver 9

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