Difference between Australian and New Zealand Leave Entitlements and Calculations – Part 2 New Zealand

In New Zealand there is employment legislation called “Employment Relations Act 2000”, & “Holiday’s Act 2003”.

The purpose of the employment relations act is to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship. This refers to both collective bargaining and individual employment agreements.

The purpose of the holiday’s act is to promote balance between work and other aspects of employee’s lives and, provide employees with minimum entitlements with regards to leave.

Annual Leave

All employees get paid annual leave.

On each anniversary of the date of commencing employment, the employee is entitled to four weeks of paid annual holidays. Casual employees will normally be paid their holiday pay each period at 8% of gross earnings.

Annual leave accumulates from the first day of employment, even if an employee is in a probation period.

The leave accumulates gradually during the year and any unused annual leave will roll over from year to year.

Unpaid leave of more than one week during the year can be managed in one of three ways.

  • The employer can choose to extend the time required before the employee becomes entitled to annual holidays by the unpaid period
  • The employer and employee can agree that an employees average weekly earnings calculation will be modified to reflect the number of whole or part weeks greater than one week that the employee was on unpaid leave
  • The employer and employee can agree the unpaid leave will have no effect on the employee’s annual holiday entitlement

Payment for annual holidays is at the greater of either the ordinary weekly pay at the time the holiday is taken, or the employee’s average weekly earnings over the 12-month period before the annual holiday is taken.

Employees are able to ask their employer to pay out and cash up one week of their minimum entitlement to annual holidays per year.


Sick Leave

For most employees, there is a minimum provision of five days’ paid sick leave a year after the first six months of continuous employment and an additional five days’ sick leave after each subsequent 12-month period. Employees can continue to accumulate 5 days of sick leave every 12 months, until they reach a maximum balance of 20 days of sick leave.

The Act also provides sick leave entitlements after six months to employees whose employment is not continuous if, during those six months, they have worked for the employer for:

  • an average of at least 10 hours per week, including
  • at least one hour per week or 40 hours per month.

People on a series of fixed-term agreements, or employees sometimes described as “casual”, would become entitled to sick leave if they met this test.

The payment for sick leave would be made where it is a day that the employee would otherwise have worked and would be made at the employee’s relevant daily pay or average daily pay (if it is not practicable or possible to work out what an employee would have earned on the day, or if the employee’s pay varies within the pay period).


Long Service Leave

There is no legislative entitlement to Long Service Leave in New Zealand, however some employers may offer this in a collective agreement or an individual agreement.


Final pay

Final pay is what an employer owes an employee when their employment ends.

An employee should get the following entitlements in their final pay:

  • Outstanding wages for hours they have worked, including penalty rates and allowances
  • all holiday pay owing to the employee

Employees should expect to receive their final wages and holiday pay in their pay for the final period of their employment. This does not, however, prevent an employer and employee agreeing that a final payment should be made earlier than this date, for example on the employee’s last day of work.


Further detail in rleation to New Zealand’s leave entitlemnts can be found at NZ Mininum Employment Conditions

4 thoughts on “Difference between Australian and New Zealand Leave Entitlements and Calculations – Part 2 New Zealand

  1. Long service leave- Does it has to be taken within a year from its due date?

    Your help will be very much appreciated.

    1. Hi Akanesi,

      You will need to refer to your Employment Contract and/or Company Policy document to answer this. Long Service Leave is not a statutory requirement.


  2. Hi there , if you work for a nz company and work in oz from time to time for that company and you allow part of your wage to be sent home is that company allowed to keep the exchange rate? For example: if i send $1000 AUD with an exchange rate of $1.10 to the nz $1 is it right that i receive $1000NZD? i wanda if you cou clarify this for me or am i on the wrong site.

    1. Hi Lee,

      This might be a question for the IRD but my thinking is you have to be a Tax Resident in either NZ or Australia. If a NZ employee etc then they should be paying you your base NZ Salary and maybe some form of Cost of Living adjustment whilst working in Australia so not sure how you are ending up with Australian $.


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