Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Employee not returning to work from parental leave

If the employee has advised their employer they won't be returning from parental leave, this creates a unique payment situation for payroll.

How is termination pay determined?

As the termination date is now the 1 st day of parental leave (when started), the following will be included:

• Any annual holiday entitlement earned prior to the termination date (that has not been used) will be paid out using:

• Section 24 for annual holiday entitlement, and • Section 25, the 8% on termination

• Any agreed payment based on the employee's employment agreement.

What is not included in this termination pay:

• Keeping in touch days worked, the value is not included in the 8%

• Any annual leave entitlement earned while on parental leave is wiped.

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

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