FAQs Database Of Frequently Asked Questions

What is holiday pay?

Holiday pay

Holiday pay is not just a payment to employees while on annual leave. Holiday pay implies multiple meanings:

  • The leave payment while an employee is on annual leave or public holiday.
  • 8% of their gross earnings to casual employees at the end of engagement.
  • 8% of their gross earnings to permanent employees during 12-month period from their start.

Ordinary weekly pay and Average weekly earnings

An employee on annual leave must get paid more than Ordinary weekly pay and Average weekly earnings.

  • Ordinary weekly pay is the amount that employee receive for an ordinary working week. It includes productivity and incentive payments, such as commission, regular overtime, and cash value of board for employee’s package. But it does not include discretionary and one-off payments.
  • Average weekly earnings are the gross earnings for the previous 12months, divided by 52. These include paid leave, certain allowances, overtime productivity, and incentive payments, such as commission, first-week compensation for a work-related injury, and the cash value of board for employee’s package. But these do not include payments not covered by the employment agreement, such as discretionary payments, weekly compensation from ACC, and reimbursement payments or allowances for work-related expenses, such as business trips, meal, and tool allowances.


Holiday pay has to be paid if employees are entitled to be paid holiday pay before starting a period of annual leave, unless employees agree that they are to be paid on the day they would normally be paid if they were not on leave or the employees were terminated from employment.

  • Holiday pay on termination: If the employee’s employment terminates within 12months or before the employee qualifies for annual leave, 8% of gross earnings must be added to their final pay. Any payment for holidays taken in advance, and any holiday pay which has been paid with ordinary pay should be deducted.
  • Pay as you go: Holiday pay can be included in ordinary pay if there is a genuine fixed-term employment agreement for less than 12 months or it is impractical to provide 4 weeks annual leave because the work is too irregular. For holiday pay in ordinary pay, it should be agreed to in the employment agreement. The payment should be an identifiable (e.g. noted on the pay slip) and at least 8% of gross earnings.

If you used “pay as you go” holiday pay incorrectly, and employees works for more than 12months, the employee will be entitled 4 weeks paid annual leave, even if they received holiday pay during the first period. It means they get paid twice for annual leave earned in the first year.


"When I first found Consol accounting on Google I thought that they must be too good to be true. Then I talked to them on the phone and I was almost certain they were too good to be true. Luckily for us they weren’t. The customer service, price and ease of use make this company out of this world. I could not recommend them any more. They are utterly seamless to integrate and effective as can be. "

Curtis and Katie Hacon Director, FiTiki Limited

"I had put off finding an accountant for a while because of the cost and perceived hassle however after my first consult with Consol, I immediately wished I had connected with them sooner. Consol are responsive, affordable and easy to deal with. Being able to outsource this aspect of my business has allowed me to focus more energy on the parts of my work that I love. "

Dr Rebecca Herald Clinical Psychologist

"I have been most impressed with Consol accounting team since I made the switch last year. The ‘Switching over’ process was really simple, after the initial set up process I can track and log my company’s financial activity with ease and accuracy. By far the most efficient and helpful service I’ve had with accounting companies. Thank you"

Vivien Ye Aesthetic Nurse Specialist, Vivip Limited

"I started out in full-time private practice over a year ago and also registered as a limited company. I love doing my work and seeing my clients, but I soon discovered just how much time doing the financials could take up. In the first year, I worked on my own tax returns and company statements, but was unsure I had done them “right” and really wanted an accountant’s expertise and guidance. From my first phone call to Andrew Joo of Consol Accounting Limited, I could tell that this service would meet my needs. He has been quick to respond, patient with me, great at teaching lots and is a Xero master user. I find the system easy to use now, and feel encouraged to get the most out of my business and confident in knowing that I will meet my tax obligations. Compared to how long it took me to struggle at doing this on my own, there is clear value in getting the professionals to do my accounting."

Dr. T Melanie Lage, MNZCCP Clinical Psychologist, Lakes Psychology Limited

“I had been searching for an option for my accounting for my business I found Consol to be so easy to get started with the team being available at nearly every point in the day! Highly recommended all those that have busy lives and need to free up some time.”

Andre Stewart Tremains Real Estate, Bay of Plenty

"Consol are great to work with responsive when I have questions, quick to prepare any necessary document and always willing to help if there's anything I'm unsure of. Very happy to have found them."

Stefan Dyke Director, SLHE Consulting Limited

"I would genuinely recommend Consol for all your financial and accounting needs. I needed an accountant quickly to help me find my feet starting up a rapid business. I genuinely had hundreds of thoughts and questions and wanted to do things right first time ... it was all a bit daunting, exciting and a steep learning curve. Andrew Joo was so supportive as he instantly responded to all my needs and then coached me through a solution and helped me understand the minefields at first . It’s really easy now the business is booming and all my accounting is taken care of so I can enjoy the fruits of my labour. I still reach out occasionally and have the answer super quick.. thanks to Consol."

Karl Jones Director, Retail Resilience

"I had just started out in business and soon realised that someone was going to have to help me with my accounting and tax compliance functions. I was very conscious of the need to be vigilant about incurring any new costs, consequently I did a fair bit of research. I came up with the conclusion that I could get everything I wanted, under one roof, from Consol Accounting, at the most competitive rate I could find on the market. It was a win-win. After joining their team I discovered there were a lot of loose ends to sow-up before I could start functioning effectively, and focus solely on running the business side. Andrew, the Founder from Consol Accounting, was an absolute God-send. He was very personal and approachable, and made setting everything up from scratch so easy and so quickly. I’ve basically been running on auto-pilot each month ever since. Just as I had planned. Thanks for your service, guys, best decision I made."

Andre Illemann Like No Other Limited, trading as GoodMooty

"I operate 3 businesses. As a busy owner I needed reliable accountant. I have been using Andrew as my accountant almost for a year and this is my second accountant. I commited transition as one of my friends recommended him and now I thankful to him. Andrew and his team provide a prompt sound and reliable service that is always professional. Andrew is always on hand to answer my queries and it is very professional and prompt in replies even on weekends and publicholidays. He has wide range of knowledge and experience in service of accounting and taxation. He has been helping me out with tax deduction and meximisation of profit. I can highly recommend him to others as he is very motivated and trusted. I would like to make longtime relationship with him and his team."

Steve Kong Director, Katsubi Hamilton & Tauranga

"When I need to get help with my finances and taxation since starting my own business, Andrew at Consol Accounting has advised me on the right approach. Professional and a great experience overall, I strongly recommend Consol Accounting to everyone who needs to get support for taxation."

Michael Park Director, Renewcar East
Book a Free Consultation

Want to know more about how we can help your business? Talk to one of our experts who will take you through our offers in detail, helping you decide if we're a good fit.